Ahead of the Macroeconomic Dialogue with social partners and EU institutions, BusinessEurope has released its latest Economic Outlook. Markus J. Beyrer, Director General of BusinessEurope, expressed concerns about the European Union's economic performance.
"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," Beyrer stated.
The Economic Outlook projects that the EU economy will grow by just 0.9% in 2024 and 1.3% in 2025. These figures represent downward revisions of 0.3 and 0.5 percentage points from previous forecasts. 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 average, with seven countries experiencing negative growth.
Manufacturing businesses continue to face challenges due to high energy prices compared to major competitors. Even before recent geopolitical tensions, declining competitiveness had weakened European export potential. Industrial capacity utilisation fell below 80% by September 2024, levels last seen in late 2020.
Recent data indicates that EU industrial production increased by only 0.2% in August 2024 compared to August 2023. A survey for the Outlook revealed that over two-thirds (72%) of BusinessEurope member federations believe that the business climate for industrial producers has either worsened or shown no improvement over six months.
To address these economic challenges, coordinated policy actions are necessary within the EU, focusing on competitiveness as a priority. The business community emphasizes reducing energy cost differentials with major competitors, lowering administrative burdens, and accelerating permitting procedures as key priorities.
"This must coincide with revitalising the Single Market and supporting European startups so they can scale and thrive globally," Beyrer added.
Read our new Economic Outlook in full.