Eurozone exporters will face ongoing challenges for years to come due to high energy costs and weak labor productivity, according to a study from the European Central Bank (ECB).
Exporters in the region have steadily lost global market share, and recent surges in energy costs have worsened their position, pushing much of the eurozone’s industrial sector into recession.
The ECB noted that these issues are likely to persist, as energy prices remain high and the region’s dependence on energy imports leaves it vulnerable to global market shifts. The pandemic and Russia’s invasion of Ukraine have further exposed the eurozone’s susceptibility to supply and cost shocks.
Comparatively, labor productivity in the eurozone has lagged behind the U.S., with the gap widening in recent years. From 1995 to 2019, U.S. labor productivity grew by 50%, while the eurozone saw just a 28% rise. This disparity has become even more pronounced since the pandemic and energy crises, with eurozone productivity increasing only 0.9% from 2019 to 2024, compared to 6.7% in the U.S.
Although some recovery is expected as supply shocks subside, the eurozone’s structural weaknesses will likely continue to hinder its competitiveness, the ECB concluded.