As promised in the last ELA newsletter, I have the pleasure to provide you with an update on the EU Commission's Spring 2021 Economic Forecast. This forecast foresees that the EU economy will expand by 4.2% in 2021 and by 4.4% in 2022 and represents a significant upgrade of the growth outlook as compared to the Winter 2021 Economic Forecast (EU GDP was expected to grow by around 3.7% in 2021 and 3.9% in 2022) which the Commission presented in February.

Growth rates will continue to vary across the EU, but all Member States should see their economies return to pre-crisis levels by the end of 2022. The rebound in Europe's economy that began last summer stalled in the fourth quarter of 2020 and in the first quarter of 2021 as fresh public health measures were introduced to contain the rise in the number of COVID-19 cases. However, the EU and euro area economies are expected to rebound strongly as vaccination rates increase and restrictions are eased. This growth will be driven by private consumption, investment, and a rising demand for EU exports from a strengthening global economy.

Public investment, as a proportion of GDP, is set to reach its highest level in more than a decade in 2022. All this will be driven by the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. Labor market conditions are slowly improving after the initial impact of the pandemic. Employment rose in the second half of 2020 and unemployment rates have decreased in most Member States. The unemployment rate in the EU is forecast at 7.6% in 2021 and 7% in 2022 but unfortunately these remain higher than that of pre-crisis levels. Inflation rose sharply early this year, also due to the rise in energy and material prices. Inflation in the EU is now forecast at 1.9% in 2021 and 1.5% in 2022. Public debt increased everywhere in 2021. All Member States, except Denmark and Luxembourg, are forecast to run a deficit of more than 3% of GDP in 2021.

It is worth noting that the Spring 2021 Economic Forecast takes into consideration information until and including 30 April, while also incorporating the reform and investment measures set out in draft RRPs for all Member States, although the details of some plans are still under discussion in several Member States. Let us hope with this positive general economic outlook, a similar trend is soon to follow for the lift industry.