LOCAL REPORT
Taking stock: the impact of COVID-19 on the European lubricant industry
The global COVID-19 pandemic has caused a major shock to the European economy and posed an unprecedented challenge to all economic sectors. As the lubricant industry is intimately intertwined with all manufacturing sectors, it too suffered a major setback.
Global disruption in supply chain and shortage in key raw materials, shrinking industrial activity, dampened consumer demand, and a major slowdown in transportation have put our industry under considerable stress.
Europe at the epicentre If we look at the European economy in 2020, it has experienced a larger hit compared to the global economy. After the initial shock in economic activity which occurred in the first half of the year, the economy rebounded in the third quarter, as containment measures were gradually lifted. However, the resurgence of coronavirus infections led to another decrease in economic activity in the last quarter of 2020.
The manufacturing production in the EU27 experienced a sharp decrease in March and April 2020 (respectively -11.1 and -20% change on the previous period), during the first wave of the coronavirus. Most sectors recovered relatively quickly during the third quarter of 2020.
How the manufacturing sector was hit It is interesting to observe that during the period September-November 2020 that coincided with the resurgence of COVID-19 cases, the manufacturing sector kept on growing, although at a more modest rate. To some extent, these dynamics indicate that EU manufacturing companies were able to adapt to the new realities of the pandemic and that the impact of
42 LUBE MAGAZINE NO.167 FEBRUARY 2022 LUBE MAGAZINE NO.166 DECEMBER 2021
Dr Valentina Serra-Holm, UEIL President
the second lockdown upon the European industry was milder.
During the first wave of the pandemic, the European manufacturing industry was impacted by short-term supply shortages due to closed borders in the EU as well as beyond. Furthermore, the confinement measures during the first wave led to partial shutdowns of factories, as employees had to stay home or could only attend the workplace in limited numbers. As a consequence, the first wave led to bottlenecks in nearly all sectors. However, some sectors were more severely impacted than others, with the digital industry and healthcare industries performing well and enabling industries like chemicals, construction, and the food and drinks sector experiencing a decline but less severely than the transportation and textile industries.
Figure 1: Manufacturing/services PMI (source OECD)
Most manufacturing-based industries recovered relatively quickly during the third quarter of 2020, as confinement measures were increasingly lifted but also as a result of various measures, such as the recognition of ‘essential’ sectors. Naturally, the
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