Energy crisis can provoke quick deindustrialization of Europe

This month the level of manufacturing activity in the Eurozone fell to its lowest point since May 2020. This suggested that the countries of Europe are approaching a recession.

While lower energy consumption is helping Europeans weather the crisis, CEOs of industry and economists are warning that if prices for energy don't fall, Europe's industrial base will weaken.

Economists point out that when the cold weather sets in and people turn on the heating, the industrial sector will be the first to go through cuts in the event of a shortage. 

Europe needs its own manufacturing companies to let the citizens economize the electric power in the context of growing prices and supply cuts of natural gas. In the last quarter, the demand for electric power and blue flame natural gas decreased, but it is still not the time for positivity.

According to Reuters, the decreasing demand for energy carriers is due not only to the refusal of thermostats. Many closed factories will never open again.

Energy-intensive industries (production of aluminum, fertilizers, chemicals) are at risk that business leaders may move production to a country with cheaper energy, such as the USA. 

Warm weather in October and the forecast of mild winter contributed to falling prices of energy carriers. However, natural gas in the US is still five times cheaper than in Europe. 

Last month at a conference in London, E.ON member of management board Patrick Lammers declared that many companies just closed their production, and all this can cause the quick deindustrialization of Europe.