Press Information

Brussels, 17 November 2008

Now is really the time to take initiatives for growth and jobs

After several excellent years, with a strong expansion for European engineering, prospects for the coming year are somewhat bleak. Apart from the expected and usual cyclical slowdown that started in the last year, the recent global financial turbulence is beginning to have an impact on the demand of both capital goods and consumer durables manufactured by the industry.

On the basis of early September data, output in the European engineering industry in terms of volume is expected to grow by 3.0 percent in 2008. However, credit restrictions and financial uncertainty, a drop in incoming orders and rising unsold inventories, in combination with lower capacity utilisation are contributing to a negative sentiment in the industry, leading our economists to forecast a growth in the production volume of the European engineering industry of just 1.2 percent in 2009. Business indicators signal at the same time that a contraction cannot be ruled out at this stage, even if this is not the baseline assumption of our economists.

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