Overview of industry in Europe

Compared to the 2007-2008 financial crisis, the COVID-19 pandemic had a greater impact on industrial activity. Although industrial activity returned b y the end of 2021, to pre-pandemic levels, some sectors continue to be affected by disruptions in global supply chains as a long-term consequence of the COVID-19 crisis. In this report, we provide a long-term review of industrial activity in the European Union. Since the 1970s, most of Europe’s major industrial powers, with the exception of Germany, have undergone a process of deindustrialisation. Conversely, the share of industry in most Central and Eastern European countries (CEECs) increased or was a least stagnating. The current bottlenecks have highlighted the dependence of European industry on global supply chains (especially Asian inputs). This dependency is now viewed by some as problematic, and relocation of some production could take place in the years to come. The CEECs, benefiting from lower labour costs and a more advantageous tax policy than Western European countries, could benefit from the relocation of production units from Asia. Consequently , the share of industry in the total value added of the CEECs (which has been increasing for several decades) could increase further, and the gap with other major European countries (France, Italy, Spain, etc.) could widen further.