An easy way of publishing your relevant EU press releases.

EU engineering: moderate rise in output and employment in turbulent times


22 Nov 2016


Innovation & Enterprise

Brussels, 18 November 2016

EU engineering: moderate rise in output and employment in turbulent times

Despite a turbulent year for the EU and the wider world, the European engineering industry’s performance remained stable in 2016 – with output set to grow by 1.0% by year-end. While this marks a slight year-on-year flattening of the growth rate over 2015 (1.3%), the forecast is for a renewed climb to 1.4% in 2017. “The European economy in general and the engineering industry in particular seem to have lost most of their volatility,” comments Tomas Hedenborg, President of Orgalime. “The business cycles, which were so typical of our industry in the recent past, seem to have disappeared between 2013 and 2016.” The main driver of rising output was a modest economic upturn in the European Union and worldwide. Productivity in industry and construction increased slightly and investment rates were on the up again. But a number of challenges continue to loom large for the engineering industry, as three of our key export markets – China, Russia and Brazil – face economic, social and political challenges.

For 2017, forecasts are for very moderate growth in most industrialised countries with increased output in emerging markets. For European industry, positive investment growth is on the cards. “There has been an upswing in investment in our sector,” remarks Adrian Harris, Director General of Orgalime, “yet European industry is still enormously underinvesting compared to the period before the economic crisis of 2008-2009.” And there are challenging times ahead: the prices of raw materials remain low, which may impact investment in emerging economies – while global business confidence is shaky following geo-political turmoil in Ukraine and the Middle East, the fallout from the Brexit vote, and the potential protectionist tendencies of a Trump presidency.

In this uncertain environment, the stable performance of the European engineering industry is encouraging – especially considering the central importance of the sector to EU employment rates. “Even with the current modest rates of growth, the number of jobs provided by our companies is rising – by 0.7% last year,” points out Adrian Harris. “This is in no doubt at least partly due to rising demand for new skills, as digitisation of products, processes and service offerings takes off across the manufacturing world.” Estimates indicate that 2016 will mark the third consecutive year of positive employment growth (0.1%) in the European engineering industry. “Our sector remains a vital source of employment and growth for the EU, with an output of 1900 billion euro and a workforce of almost 11 million people in 2015,” underlines Tomas Hedenborg. “To bolster industry’s strength and encourage further investment, policymakers need to work in partnership with economic actors. Better collaboration and improved governance in the institutions, as well as a supportive industrial policy approach, are a must if our industry – and the industries whose growth it enables – are to thrive in the years to come.”




European engineering industry expects to grow by 1% in 2016.

Orgalime’s economists compile and analyse the latest data and forecasts of the engineering industry twice a year. We specifically analyse the economic trends of Metal products, Mechanical engineering and Electrical engineering, electronics, ICT & instruments (mainly chapters 25 to 28 of the NACE rev.2 business nomenclature) as well as the sector Installation and repair services (chapter 33 of the NACE rev.2 business nomenclature).

Based on official data available, we estimate that the engineering industry’s total turnover value in the European Union reached about €1,900 billion in 2015. Employment in the engineering industry rose to 10.9 million people of which 1.25 million were working in installation and repair services.


Forecast annual change in output (current prices) of European engineering industries by sector

(Year-on-year growth in %)

Sector / year



Mechanical engineering



Electrical, electronics and instrument engineering



Fabricated metal goods



Total Orgalime industries




2016: Output will grow by 1.0%  

The activity in the European Orgalime-sectors is expected to grow by 1.0% this year and by 1.4% in 2017. The growth rate is a little lower than the growth rate of 2015 which was 1.3%. The European economy in general and the engineering industry in particular seem to have lost most of its volatility. The business cycles, which were so typical of our industry in the recent past, seem to have disappeared between 2013 and 2016. 

The main driver of the growth in 2016 was the slight economic recovery in the European Union and the rest of the world. The output of the European industry and construction sector increased slightly and also the investment rates were on the up again. The automotive industry (the number of new registered passenger cars and commercial vehicles increased enormously) was certainly one of the growth motors of this European growth. 

But the European engineering industry also faced a lot of challenges. Three important export markets were faced with significant problems. This is partly because they are important exporters of raw materials and the prices of these are very low for the moment and partly because they face internal economic, social and political challenges.

First, Chinese GDP-growth was lower than ever in recent years and the structural overcapacity in many Chinese economic sectors seems to have stopped the investment boom of the last few decades.

Secondly, Russia also was a decreasing market for European engineering industry. The conflict with Ukraine (and the EU-sanctions against Russia as a consequence of this), the depreciation of the rouble, the lack of access to finance of Russian business partners (which makes it impossible for them to buy) and the dependence of the Russian economy on oil exports were the 3 important determinants of the decrease of our industry’s Russian export market.

Finally, Brazil too decreased as an important export market. The growth miracle of this country, amongst others induced by the organisation of large sport events, seems to have ended. 


2017: Output will grow by 1.4%

In 2017, the GDP-growth should again be very moderate in most industrialised countries. For emerging markets, the IMF predicts a higher growth rate than in 2016.

The investment growth of European industry is expected to be positive. Although the European industry is enormously underinvesting compared to the period before the economic crisis of 2008-2009, we still see a small upswing in European industrial investment figures.

Nevertheless, the prevailing sentiment of uncertainty and some risks could have a negative effect on these positive growth perspectives. The effects of the (low) prices of raw materials could lead to lower investment in oil and raw materials, especially in emerging countries such as Brazil, China, Russia and Mexico. The geo-political tensions in Ukraine, Syria and Iraq will continue to have a negative impact on global business confidence. The effects of Brexit on Europe’s integration project and last, but not least, the way in which President-elect Donald Trump will deal with trade issues and/or protectionist measures is putting a strong brake on the European and global growth motor.



It is estimated that employment grew very slightly by 0.1% in 2016. This is the third consecutive year of positive growth in employment in the European engineering industry. The growth rate in 2015 was 0.7% and in 2014 we calculated a 0.3% employment growth. In 2017, however, Orgalime economists expect no continued increase in employment as the number of staff working in our industry is expected to stabilise (0.0% growth).


Mechanical engineering industry

The European mechanical engineering industry accounted for an annual turnover in 2015 of around 640 billion euro. Employment is estimated at more than 2.9 million people.

In 2014 the mechanical engineering industry was the strongest growing sector within the engineering industry. In 2015 output grew below average by 0.8%, but in 2016 and 2017 we expect that mechanical engineering will grow again above the average for the industry as a whole.

Mechanical engineering is profiting from the small recovery of the European industry. Since the beginning of 2013, European industrial output and investment figures are slowly, but steadily, on the up and this is good news for European mechanical engineering.


Electrical, electronics, ICT & instrument industries

The electrical, electronics and instrument industries (including medical and dental industries) employ more than 3 million people. The industries accounted for an annual turnover in 2015 of around 660 billion euro. 

The sector showed a weak performance in 2013, but returned to growth in 2014. In 2015 it was the best performing sector of the Orgalime industries with an output growth of 2.6%. In 2016 and 2017, growth in output is expected to decrease, but should still remain slightly positive (0.5% in 2016 and 0.1% in 2017).

One challenge for this sector is to deal with the foreseen investment projects in the telecommunication sector and another will be to capitalise on the technological and commercial evolution in the energy sector. 


Fabricated metals and metalworking industry

The fabricated metals and metalworking industry’s output in 2015 is estimated at around 470 billion euro. In terms of employment this is the largest sector of the European engineering industry, employing more than 3.6 million people. This sector produces, to a large extent, inputs and products used in other engineering sectors such as machinery.

The performance of this sector of our industry normally follows the performance of the engineering industry as a whole. However, in 2015, the growth of 0.5% in the fabricated metals and metalworking industry lagged behind that of the other sectors. In 2016 and 2017, the sector is expected to grow faster (1.7% growth in those 2 years).

The fabricated metal goods sector is growing faster and is benefitting from the slight recovery seen in the mechanical engineering and the construction industry and from the spectacular growth figures in automotive.


IHI - Innovative Health Initiative
Scientific Project Officer
Project Manager
EUI - European University Institute
Director of the Communications Service
LP Brussels
Association Manager
VDMA European Office
Regulatory Manager (m/w/d)
Alber & Geiger
The Global Partnership for the Prevention of Armed Conflict (GPPAC)
Final External Evaluation Consultant