Russian sanctions take their toll

摘要

Sanctions against Russia have hit manufacturers in some EU countries - notably Germany. But what does the future hold? In this exclusive column, Alan Beaulieu, chief executive of ITR Economics, and Jacqueline Green, the company's managing economist for international business, examine the state of manufacturing in the UK and across the EU. Sanctions imposed against Russia over the war in Ukraine are taking a toll on the economy across Europe. Nations with close trade ties to Russia, such as Germany, have been impacted most severely and this is affecting industrial production in Western Europe, which is now just 0.5% ahead of last year on an annual basis. Though growth has slowed in Germany as a result of the sanctions, economic conditions remain expansionary. However, year-on-year contraction in economic activity in France, Italy, and The Netherlands will continue to place downward pressure on the region as a whole. Any gains in market share in these economies are unlikely to be as profitable because of the expected regional economic weakness going forward. Conditions in Western Europe are unlikely to improve before late 2015 with the business cycle recovery probable for 2016.