Easing supply bottlenecks to bolster Eurozone industrial rebound
The easing of the severe supply-chain bottlenecks that brought the eurozone’s industrial recovery to a standstill in early 2021 will be gradual, with setbacks along the way very possible. But we see signs that the worst is over and we expect eurozone industrial production to grow a strong 4% in 2022. This year’s laggards – Germany and the auto sector – are likely to outperform.
What you will learn:
- The clearest indication of easing is in the supply of intermediate goods, where clogging due to the massive restocking cycle and hoarding of inputs is fading.
- Progress in vaccinating the global factory workforce suggests that the drag from Covid-related supply disruptions should begin to fade.
- Resolving the semiconductor shortage, where an upshift in demand has coincided with severe supply constraints, may take longer.
Big shifts are underway in Russia-China trade
Data for Q3 on the volume of China's imports of crude from Russia show a drop against the June level. Rather than an indication that China's demand has peaked, this may be a sign that China is preparing for the Russian oil price cap recently agreed by G7 by shifting some of its purchases to the grey market.Find Out More
Levelling up is unlikely under the Liz Truss government
The government's levelling up ambition has probably been made more, not less, difficult by the new "Plan for Growth". Policies of lower taxes, less regulation, and a smaller state are unlikely to have much beneficial impact on long-term growth at the national level, let alone in those regions with long track records of underperformance.Find Out More