Supply bottlenecks drag down Eurozone manufacturing output
According to data released on Wednesday, the general shortage of semiconductors and other materials is dragging down industrial output throughout the euro zone.
According to data from Eurostat, the EU’s industrial output in May fell by 1% from the previous month. Economists surveyed by Reuters had expected a decline of only 0.2%.
Beyond expectation Monthly decline Before the coronavirus pandemic, factory output was 1.4% lower than its February 2020 level.
Although recent investigations indicate that the manufacturer’s Order surge Due to strong global demand. However, due to the shortage of key materials such as semiconductors, steel, copper, wood and plastics, their production is increasingly hindered.
The worst-hit sectors were cars, trailers and semi-trailers, whose production fell by 7.8% month-on-month and was 25% lower than pre-pandemic levels.
Economists expect supply chain disruptions to continue for most of this year, which means that the Eurozone economy is increasingly dependent on surges in consumer spending to drive recovery from last year’s historic recession.
“This has had a significant negative impact on growth, offsetting part of our upside risk of the Eurozone GDP estimated at 1.3% in the second quarter. [than expected] Reopen [after lockdowns ended],” said Jacob Nell, Morgan Stanley’s head of European economics.
However, he pointed out that there is “room for cautious optimism” later this year, “because industrial activity may be supported by inventory rebuilding and a more general strong global rebound once the supply situation allows.”
German Automobile Manufacturers Association caveat Last week, the company predicted that the severe shortage of semiconductors will continue to affect production in the “mid-term” and lowered its production forecast for this year by 400,000 units to 3.6 million units.
Industrial production fell in Germany, France, and Italy in May, and Spain was the only large economy in the European Union that reported an increase in factory output.
Contrary to the slowdown in manufacturing, economists have become more optimistic about the prospects for the larger services sector in the Eurozone, thanks to the recent removal of Covid-19 restrictions in many countries.However, the spread of Delta variants is causing A little worried Services may also face the risk of interruption.
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Rory Fennessy, an economist at the Oxford Economics Institute, said: “As shown by high-frequency mobile data, consumers have little hesitation in restoring the service after reopening.” “But again, the performance of the service will be affected by the development of the Delta variant. influences.”
According to Eurostat, the output of non-durable consumer goods fell 2.3% month-on-month in May, the output of capital goods fell 1.6%, and the output of intermediate products fell 0.2%. In contrast, the output of consumer durables increased by 1.6%.