COVID-19 Pandemic and its effect on the EU Industry

Abstract

The COVID-19 pandemic exerted a strong impact on the economy, including on the industrial sector. In this context, we focused our analysis on estimating the impact of the COVID-19 shock on the EU industry developments. Therefore, we estimated two econometric models to identify the impact of the COVID-19 shock on the confidence in industry and on the industrial production, over the period January 2018 - November 2020, using Panel EGLS method. Our estimation is based on Eurostat data with monthly frequency, but also on a dummy variable we have created to catch the COVID-19 restrictions (shock). We have found a strong impact of the COVID-19 shock on both industrial indicators, which supports the need to continue adopting appropriate policies to boost this sector, since the outlooks are still exposed to uncertainty and depend on the vaccination speed.