Introduction
What is the state of Manufacturing in Europe?
A question that is currently raised by many people: politicians, economists and business leaders.
In recent decades, Industrial corporations in the Western developed economies have moved their manufacturing facilities around the world: outsourcing resulted in long, complex and lean (sometimes anorexic) supply chains. This process was mainly driven by economic reasons, combined with availability of low cost labour.
But times are changing. The focus on Manufacturing in Europe is gaining momentum across the continent. The energy crisis, climate crisis, the war in Ukraine and the global geopolitical instability is forcing Europe to reconsider industrial policies and manufacturing capabilities.
There are many ways to look at the state of Manufacturing in the European Union.
Therefore, following my doctoral research work, the Revitalize Industry Institute now launches the Made @ Europe index.
The Made @ Europe index tracks three indicators:
- The actual number of people working in the Manufacturing sector
- The Value add of the Manufacturing sector
- The Manufacturing Value add per person
Geographical scope
The Made @ Europe index will look at total EU27 coutries plus two specific countries: Germany and the Netherlands.
Germany is chosen because it is the largest EU economy with the highest Manufacturing value add and employees in Europe. The Netherlands is chosen because it is a top 5 economy in Europe with the lowest % of people working in Europe (except for Luxembourg).
Source data come from EUROSTAT, the statistical office of the European Union.
We will be publishing the Made @ Europe index every quarter, once the Eurostat data are available.
Now, a short analysis on the actual development of the data will be presented in a commentary section.
The Made @ Europe index: 3rd Quarter of 2023
Number of people working in the Manufacturing sector
The actual number of people employed in Manufacturing is dropping in EU27 as well as the percentage of people working in the Manufacturing sector. Roughly 1 out of 6 people now work in Manufacturing in EU27. In Germany 1 out of 5 and The Netherlands 1 out of 12 people work in Manufacturing. Overall, a steady and continuous decrease of the number of people working in Manufacturing can be seen across Europe.
Added value of the Manufacturing sector
Total added value of the Manufacturing sector increased with almost 9% to over EUR 2,500 billion. The percentage of Manufacturing as part of the total Value add in EU increased slightly to 16.7%. Increased Manufacturing Value add (in absolute EUR and as percentage of total Value add) suggests increased automation and robotization of manufacturing processes, delivering more value with less people employed.
Added value per person in Manufacturing
The moving annual average shows a clear increase with about 10% per employee versus a year ago. Significantly higher values per employee are recorded in Germany (+21%) and The Netherlands (+81%) vs EU27. High added value per employee suggests the presence of mainly high value add manufacturing sectors in these countries (example: high tech complex manufacturing in e.g. the semiconductor market or automated production facilities in the automotive market).
Dr. Gerard Ekhart DBA
Founder Revitalize Industry Institute
February 2024
