In June, the industrial production in remained practically unchanged in the euro zone (see figure 1). Germany recorded a very slight upturn, while France and Italy continue to deteriorate. It is an indisputable fact that industrial and economic development remains in the immediate vicinity of a recession remains.
This is also true for the south of Europe, which all need an urgent recovery (see figure 2). Spain and Portugal stagnate at the current low level and the situation in Greece is catastrophic. Greece appears to fall in an irretrievably lasting recession which is only being mitigated by the fact that all young and well-educated Greeks are leaving the country.
The northern countries also stagnate (see figures 3 and 4). There is a very slight recovery in Austria and Belgium. The Netherlands do not escape from a recession that has lasted by now for more than five years. In Northern Europe, Norway literally crashed and Sweden experiences a new setback. In Finland, there was most recently a very slight upward movement, but the fact remains that even this “model country” has by now spent five years in a recession.
Neither is there any progress in the Baltic states. Contrary to the widespread myth that the Baltic countries are experiencing a boom because they adapted quickly and radically, since 2011 virtually only stagnation can be witnessed (see figure 5).
The situation is similar in Central and Eastern Europe (Figures 6 and 7). In the larger countries, such as Poland, Hungary and the Czech Republic, the slight upward trend tilts increasingly towards stagnation, while other countries, such as Bulgaria and Romania, have been stagnating since 2014. In Slovakia, the upward movement that lasted for several years has recently clearly become much weaker. Slovenia, however, managed to overcome its longstanding stagnation and currently shows a Slovakia-like growth.
Croatia, which had to overcome a long dry spell, records a rise in industrial production of about ten percent in the last year. Whether this is a stable development still remains an open question.
As we have often pointed out, in these small countries some Western companies play a major role through direct investment for industrial production and GDP growth. New infrastructure and production significant affect manufacturing output. But this is not a proof that a durable recovery is underway.
You can read in the third part how the other parameters, construction and retail, are evolving and which economic policy conclusions should be drawn from this analysis.