Title: Reassessing the Decline of EU Manufacturing: A Global Value Chain Analysis
Authors: MARSCHINSKI ROBERTMARTINEZ TUREGANO DAVID
Publisher: Publications Office of the European Union
Publication Year: 2019
JRC N°: JRC118905
ISBN: 978-92-76-11253-2 (online)
ISSN: 1831-9424 (online)
Other Identifiers: EUR 29999 EN
OP KJ-NA-29999-EN-N (online)
URI: https://publications.jrc.ec.europa.eu/repository/handle/JRC118905
DOI: 10.2760/30611
Type: EUR - Scientific and Technical Research Reports
Abstract: The declining contribution of EU manufacturing to total GDP and the simultaneous fall of its share in global manufacturing have led to concerns about an overall loss of EU competitiveness, in particular vis-à-vis China. We analyse the empirical evidence underpinning these concerns by applying a newly developed decomposition technique to global input-output data spanning the years 2000 to 2014. In this, we consider both the sectoral and final demand (or value chain) definition of manufacturing. We find, first, that manufacturing’s lower share in EU total value added has generally been exaggerated due to the use of nominal measures, noting that higher-tech manufacturing actually grew in real terms. Second, the decomposition analysis reveals that lower economic growth in the EU relative to the world had the strongest negative impact on the contribution of its manufacturing sector, while shifts in demand patterns exerted a negative (positive) impact for activities with lower (higher) technological content. And third, the observed loss of market shares confirms a downturn of EU manufacturing competitiveness, especially in textiles and electronics, with pharmaceuticals as the only industry showing resilience under external competition.
JRC Directorate:Growth and Innovation

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