Economic Performance and Competitiveness
Industry continues to play a pivotal role in the EU economy as a major employer, supporting high value jobs. Industrial companies also indirectly support jobs and value added in other sectors. But European companies risk falling behind global competition. The European share of the largest companies by market capitalisation has decreased and is now well below the US. The European share of ‘unicorn’ start-ups is even weaker and far behind the US and China.
Ensuring the competitiveness of established and new EU industry should remain a top priority for politicians and policymakers. The global corporate landscape is changing rapidly and European firms risk losing out to their American and emerging competitors. Europe must become a successful incubator for start-ups. This requires an innovation-friendly and stable regulatory framework.
Confidence is returning to the euro area, which is now experiencing a long-overdue cyclical recovery. But European manufacturing is losing global market share and export share, while labour unit costs in the euro area are increasing. Private investment has begun to recover, but public investment continues to fall.
European policymakers, industrial companies and other stakeholders in European manufacturing must avoid complacency if Europe’s leading position in manufacturing is not to be further eroded. Productivity must increase if European manufacturing is to remain competitive. This requires investment in skills, efficient labour markets, capital investment and policy frameworks that are supportive of growth. Both the private and the public sectors have a role to play in this.
The growth outlook is mixed
Manufacturing competitiveness is under pressure
Labour productivity needs to rise
Low investment is constraining competitiveness
Private debt levels remain high
Industry remains the cornerstone of the EU economy
The nature of global competition is changing
European economies are ageing fast
