Ahead of today’s Macroeconomic Dialogue with social partners and EU institutions, BusinessEurope has published its new Economic Outlook. BusinessEurope Director General Markus J. Beyrer commented:
“In recent years, the European Union’s economic engine has slowed considerably. As highlighted in the Draghi Report, the EU must take decisive action to avoid the 'slow agony' of stagnation. Now it will be crucial to see delivery on the promise to make it easier to do business in Europe.
According to our Economic Outlook, the EU economy is projected to grow by just 0.9% in 2024 and 1.3% in 2025 – both figures are downward revisions of 0.3 and 0.5 percentage points compared to our last forecast. Over the two-year period from the second quarter of 2022 to the second quarter of 2024, the EU economy grew by only 1.2%. Eleven member states reported growth rates below this already modest average and, notably, seven countries experienced negative growth.
Businesses in the manufacturing sector continue to face challenging times as energy prices remain high compared to major competitors. Even before the latest increase in geopolitical tensions, declining competitiveness had already weakened the export potential of European businesses. Most worryingly, industrial capacity utilisation had fallen below 80% by September 2024, back to levels last seen in late 2020.
The latest figures show that EU industrial production was up a mere 0.2% in August 2024 compared to August 2023. When surveyed for the Outlook, over two-thirds (72%) of BusinessEurope member federations stated that they believe the business climate for industrial producers has either worsened or shown no improvement compared to six months ago.
To successfully navigate these serious economic headwinds, the EU must take coordinated policy actions and put a renewed focus on competitiveness. Top priorities for the business community include reducing the energy cost differential to our major competitors, reducing administrative burdens and speeding up permitting procedures. This must coincide with revitalising the Single Market and supporting European startups so they can scale and thrive globally.”
Read our new Economic Outlook in full here.
