The economic recovery in Europe is sapped by a paucity of fiscal impulses and near-absence of centrally managed monetary stimulus, according to a report from the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Productivity and Innovation, in its most recent European Industrial Outlook, a report covering 14 major industries and 13 major economies.
The report provides analysis and forecasts for 12 major countries – Austria, Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Poland, Spain, Sweden, and the United Kingdom.
"The manufacturing outlook calls for Eurozone production to have barely advanced in 2014 but accelerate to just over 2 percent in 2015," Kris Bledowski, director of economic studies and report author, wrote. "Countries coming out of support programs (Greece, Spain, and Ireland) as well as the UK and most of the emerging economies will benefit from moderate upticks in domestic investment and consumption spending."
The core Central European Big Three of the Czech Republic, Hungary, and Poland are expected to be the growth leaders in 2015. Hungary is forecast to advance 5.2 percent and Poland and the Czech Republic are each anticipated to grow by 5 percent. Industrial output remains robust across the board in Hungary; Poland's GDP is holding up well, spurred on by a sharp pickup in investment activity and personal income growth; and investment expenditures in the Czech economy are running at double-digit rates on the back of pent-up demand and rock-bottom interest rates.
Nine of the 12 countries in the report are expected to have grown in 2014, led by Hungary at 8.4 percent, and all 12 are anticipated to gain in 2015.
France and Italy, however, are forecast to advance by only 0.9 percent and 0.8 percent, respectively, this year. Business investment in France is down and exports are slowing. Business investment in Italy, while still declining, is showing signs of stabilizing; Bledowski sees minimal growth, even under the assumption of low oil prices and continued depreciation of the euro. The other seven countries included in the report will grow in the range of 1.8 percent (Germany) to 3 percent (Austria).
