It seems that the EU finally realizes that their de-industrialization process has been going too far and put them at a huge competitive disadvantage vs. the US.
The European Union requires radical reforms through a new industrial strategy to ensure its competitiveness, to boost social equality and to meet climate targets, according to a keenly awaited report from economist and politician Mario Draghi. The proposals laid out in the report would require between 750 billion and 800 billion euros in additional investment each year, the European Commission estimates. Other areas of concern include supply chain security and defense spending, the report states. BOTTOM-LINE: This could mean more debt, more money printing, more inflation, higher nominal growth. Source: CNBC
Two scary trends in Europe.
Interesting to see how the year of the Euro introduction coincides with Italian industrial production trend. Meanwhile, German deindustrialization has just brought its industrial production to 2006 level... Source: Chart @DanielKral1, Michel A.Arouet
$RACE Since Ferrari IPO'd in 2015, operating margins at the luxury vehicle manufacturer have grown by almost 12%
Underlying operating income has grown at a 16% CAGR over the last decade. Source: Koyfin
As highlighted by Michel A.Arouet on X: the German business model was based on:
1. Cheap energy from Russia 2. Cheap subcontractors in Eastern Europe 3. Steadily growing exports to China All three are gone by now, and not much has been done to change the trend. Source: Bloomberg, Michel A.Arouet
Deindustrialization continues unabated in Germany.
Industrial production fell by 2.5% in May to a level last seen in 2010 - except for covid –, meaning industrial activity is unlikely to contribute to GDP growth in Q2. The consensus forecast was for a 0.1% increase in May. Production in industry, excluding energy & construction, dropped 2.9%, mainly driven by lower activity at car & machinery producers. Construction output decreased 3.3%, while energy production increased 2.6%. Source: Bloomberg, HolgerZ
German business model was based on:
1. Cheap energy from Russia; 2 Cheap subcontractors in Eastern Europe; 3. Steadily growing exports to China. All three are gone by now Source: Michel A.Arouet, Bloomberg
Everyone is aware of German deindustrialization by now, unfortunately industrial production in other major European countries is not looking much better.
Source: Michel A.Arouet, skhanniche
Deindustrialization in one chart:
Price for CO2 emission rights (Carbon Futures) hit lowest since Jul 21. Source: HolgerZ, Bloomberg
