Unemployment to reach an all-time high in the Eurozone

Unemployment to reach an all-time high in the Eurozone

While there  is good reason to expect the Eurozone economy to recover over the next couple  of years, progress is likely to be very slow

  After falling by an estimated 0.5% this year, we expect GDP  to grow by about 1% in 2014 and then by some 1.5% a year in 2015–17. This would  mean that it would take eight years for the economy to regain its pre-financial  crisis peak level of GDP.

  Given the importance of exports to the recovery, we expect  manufacturing to enjoy a turnaround in fortunes, with output falling by 0.8% in  2013, but recovering to grow by 1.7% in 2014. We expect financial and business  to see an improvement; with output falling modestly, this year before  accelerating to grow by 1.3% in 2014 as business confidence strengthens.

  The outlook is weaker for other sectors, particularly those  exposed to the consumer and government sectors. We expect construction to  perform very poorly this year. We forecast output to fall by 3% as the  combination of a lack of finance for both public and private projects and the  continuing legacy of a long period of oversupply in a number of housing  markets.