European Industry Faces Shrink or Shut Decisions on Energy Pain https://finance.yahoo.com/news/european-industry-faces-shrin…
Europe’s biggest industrial firms have been banking on spring to bring down soaring energy costs. Those hopes faded this week as Russian tanks rolled into Ukraine. Smelters and chemical factories across Europe were already struggling before the invasion sparked another jump in gas and electricity prices. Now, a growing list of companies including Europe’s biggest chemicals maker BASF SE are warning the energy crisis will keep hacking away at their bottom lines for the foreseeable future…
BASF isn’t alone. The energy-intensive metals industry is also struggling. Aluminium Dunkerque Industries France, Europe’s largest aluminum smelter, had planned to ramp up curtailed production after the French government helped shoulder as much as 80% of the cost burden. But the renewed surge in prices following Russia’s invasion of Ukraine has put the plan on ice, a labor union official said…
Companies are asking governments for help. France has already moved to relieve gas costs for consumers and Prime Minister Jean Castex froze gas tariffs in November…Italy has also slashed taxes on gas consumption. Germany, which imports more than half of its natural gas from Russia and has the highest industrial electricity prices in the EU, has yet to step in.
European Industry Faces Shrink or Shut Decisions on Energy Pain
It doesn’t matter if they do not stop Putin’s aggression.
Algeria has offered to help Europe with gas supplies. Germany said they are building 2 new LNG ports. Sure it won’t happen overnight, but until Putin is gone, Europe will be turning to sources other than Russia.
And in European fashion, I imagine the governments will mostly step in and just keep the factories open.
European Industry Faces Shrink or Shut Decisions on Energy Pain — It doesn’t matter if they do not stop Putin’s aggression.
Sure, and if there is a nuclear exchange then it all become moot.
However, this is a problem that predates the current crises, and one they have been wrestling with for some time. High input costs, be it labor or energy, have a tendency to make one uncompetitive.
High input costs, be it labor or energy, have a tendency to make one uncompetitive.
I’m not sure Europe is uncompetitive.
Germany: 2nd largest trade surplus in the world, 4th largest economy
Ireland: 4th largest trade surplus in the world
U.K.: 5th largest economy in the world
France: 6th largest economy in the world
Netherlands: 6th largest trade surplus in the world
Italy: 7th largest trade surplus in the world, 9th largest economy
Spain: 14th largest economy in the world
They have had higher labor and energy costs for many decades.
Fears were compounded after a Eurostat study published on Monday (15 January) found that month-on-month industrial production in the EU fell by 0.2% in November last year, the third consecutive monthly decrease. Year-on-year industrial output was also down 5.8% in November after declining by 5.4% in October.…
Month-on-month production of capital goods such as buildings, machinery, and equipment fell by 0.8% across the bloc in November after dropping by 0.7% in October. Capital goods production was also 8.7% lower in November compared to the same month in 2022.
Here’s a look at manufacturing by country, focusing on the world’s top ten manufacturing countries and what they contribute to the global manufacturing economy.
Note that industrialized countries consistently compete for a place, so this list is likely to change as years go by.