Report

Are there any signs of reindustrialisation in the euro zone?

The weight of manufacturing industry in the euro-zone economy has been very stable since 1995, at just over 15%. Can we see an upturn in the weight of industry and a reindustrialisation of the euro zone in the recent period? For this to be the case, the following conditions must be met: Value added and employment in manufacturing industry must increase faster; growth in manufacturing employment must not be due only to a decline in productivity; Productive investment and foreign direct investment must increase; It must become more attractive to locate industrial companies in the euro zone, which may be due to the depreciation of the euro, increased spending on R&D and automation; Public or European aid to industry must increase. Analysing these different points, we can conclude that: The weight of manufacturing industry remains stable, and productivity gains in manufacturing industry are weakening; Productive investment is growing, but foreign direct investment is declining; It is attractive to locate industrial facilities in the euro zone; And public aid to industry is increasing. All in all, the conditions for reindustrialisation are present, but not reindustrialisation itself.
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Natixis

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