EU mechanical engineering output should rebound 10.6% on-year in 2021 and a further 3.6% in 2022, with new business investment likely to be supported by interest rates at record lows, says European steelmakers’ association Eurofer. Covid-19-linked global supply chains are expected to ease in the third quarter.
EU mechanical engineering output rebounded 3.8% on-year in Q1 2021, the first growth since Q2 2019.
The manufacturing recovery is expected to continue, albeit at historically low levels of output. During the 2019 downturn and throughout 2020, companies in most downstream sectors refrained from investment in new machinery and equipment and have instead favoured maintenance and the upgrading of existing machinery, Eurofer notes in a report seen by Kallanish.
“The combined effect of persistently low business confidence, trade friction, weakened demand in key domestic markets in the EU, and policy uncertainty in general may continue to put the brake on investment decisions at least until the second half of 2021,” Eurofer observes.
The main EU mechanical engineering export destinations such as the US and China are experiencing a stronger-than-expected economic recovery and trade flows are also improving at a rather fast pace. However, the recovery in the EU is lagging behind.
Adam Smith Germany