Report
Patrick Artus

What happens when services grow while industry is in recession?

We will look at the case of the euro zone: we are now seeing a recession in industry and relatively sustained growth in services. This is the case throughout the world. What should be expected of this imbalance? It results from the shift in demand from industry to services, and should lead to: A fall in investment (industry is more capital-intensive) and an improvement in foreign trade (due to the fall in imports of industrial products); A slowdown in wages and in productivity (which are lower in services) and an increase in inequality; An increase in the relative price of services, attracting factors of production to services .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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