European Industrial Outlook: Eurozone Back in Recession - Modern Distribution Management

Log In

European Industrial Outlook: Eurozone Back in Recession

Second downturn is wide-ranging with little support of aggregate demand.

The Eurozone is back in recession, and this second downturn is wide-ranging with little support of aggregate demand, according to the Manufacturers Alliance for Productivity and Innovation (MAPI) European Industrial Outlook, a report covering 14 major industries.

\"TheDownload a Free Chapter:
The Little Black Book of Strategic Planning for Distributors

Submit your email address below to receive a chapter of Brent Grover’s new book. When you submit your email you will be signed up to receive weekly distribution news updates.


The report separately analyzes the distinct regions of Western Europe and Central Europe. The former generally comprises the 17 countries of the currency union (Eurozone), while the latter includes the three largest economies of Central and Eastern Europe (CEE3): the Czech Republic, Hungary and Poland. All forecasts are based on a proprietary MAPI model.

Kris Bledowski, Ph.D., MAPI senior economist and report author, forecasts GDP in the Eurozone to remain in negative territory: -0.7 percent in 2013 and -0.4 percent in 2014. GDP growth in Central Europe will avoid the recession, with Bledowski envisioning 1.1 percent growth in 2013 and 2.3 percent growth in 2014.

“In the Eurozone, only exports provide net additions to national income despite slowing Asian economies and lackluster growth in North America,” Bledowski said. “Consequently, GDP in 2013 will not fully recover its 2012 losses, but domestic demand – pulled by investment spending – is slated to inch up about 1 percentage point by 2014.”

While manufacturing production is expected to rise by 0.7 percent in 2013 and by 1 percent in 2014 in the Eurozone, prospects are brighter in Central Europe, where manufacturing production is anticipated to grow by 5.4 percent in 2013 and by 6.7 percent in 2014.

“Since our last report in May, the vast majority of industrial sectors in the Eurozone have moved into an accelerating decline phase,” Bledowski said. “The Central European cycle, however, has barely changed since six months earlier; most durable investment goods are doing well and most process industries seem to be at a cyclical peak. Central Europe also serves as a key manufacturing hub and platform and plays a large role in the European supply chain.”

In the Eurozone, the report predicts eight of the 14 industries will show growth in 2013, led by motor vehicles at 1.4 percent. Wood and products will remain flat. In 2014, 11 of 14 industries are anticipated to grow, with computers and electronics expected to top the leaders at 2.6 percent. Petroleum and coke is anticipated to remain flat. Only one industry, textiles, is forecast to decline in both years.

In Central Europe, 10 of 14 industries are expected to show growth in 2013, and 11 should increase in 2014. Rubber and plastics is forecast to lead the 2013 growth sectors at 6.3 percent; for 2014, motor vehicles will advance by 8.6 percent. Three industries, however – textiles, food and beverages, and petroleum and coke – are likely to decline in both years.

Bledowski reports that no industries are in the accelerating growth (recovery) phase of the business cycle in the Eurozone, while one, computers and electronics, is in the decelerating growth (expansion) phase. Ten industries are in the accelerating decline phase (either early recession or mid-recession) and three are in the decelerating decline phase (late recession or very mild recession).

In Central Europe, three industries are in accelerating growth, eight are in decelerating growth, two are in accelerating decline, and one – computers and electronics – is in decelerating decline.

“European companies continue to shy away from committing resources to capital formation, and the region’s leaders are struggling to manage declining confidence in European institutions,” Bledowski said. “On the bright side, the ECB promises to avoid a collapse of the euro through muscled monetary operations.”

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!


articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events



You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.