Line graph of the government's stringency index, 100 = strictest indication The new bans are lighter than in the spring

Virus restrictions deal less of a blow to the European economy than they did in the spring

The wave of new coronavirus lockdowns that broke out across Europe in the past few weeks has hit consumer services activities hard, but the overall economy is less affected than it was at the start of the pandemic in the spring, according to high-frequency data indicators.

Alternative economic data such as truck mileage, trips to entertainment venues and offices, and restaurant bookings have been widely used since the beginning of the pandemic as it provides a more up-to-date view of the economy, although less comprehensive and reliable than official data.

The indicators show the damage the new restrictions are doing to the European service industry, but they also suggest that more people are still traveling to work than in the spring and manufacturing is still in operation.

“Governments have learned lessons from the first lockdown, as sectors that offer little benefit in virus containment are still open,” said Bert Colijn, ING economist. “Governments have largely focused on maintaining economic activity and restricting recovery and retailing. . . This is a “lock of fun”. “

According to geolocation phone data collected by Google, trips to entertainment and retail centers plummeted in the first week of November.

The largest declines were seen in countries where the new lockdown included the closure of all non-essential retail stores such as France and Ireland.

In countries where the restrictions are more stringent, particularly in Germany, mobility to hubs for consumer services has shrunk less.

In some countries like Spain and Italy, governments have put in place a mix of curfews and localized bans instead of strict national measures.

Line graph showing the percentage change compared to the January 3rd-February 6th average (7-day moving average) showing that European visits to retail and leisure facilities have fallen sharply

The impact on the European economy as a whole appears to be milder than in the spring, as factories and construction sites have remained open in most countries.

Travel to work, even in the countries with the most stringent lockdowns, has not fallen to the levels seen at the height of the first wave of the pandemic. In France, it fell by 30 percent in the first week of November – half of the fall in the spring.

In Germany, work-related travel has hardly changed since the height of the economic reopening this summer.

Ana Boata, head of macroeconomic research at trade credit insurer Euler Hermes, said the economic success of the new restrictions on the eurozone economy last quarter should prove “30-60 percent less severe” than in the spring, and with it the bloc recovery “So it could be delayed, but not derailed”.

For the last three months of this year it forecast a decline in gross domestic product in the euro zone by 4 percent compared to the previous quarter.

However, she also warned of an increased risk of “scaring the economy in the long term. . . in the face of more bankruptcies, higher unemployment and increased pressure on the banking sector ”.

The line chart of the percentage change compared to the average from January 3rd to February 6th (moving seven-day average) shows that mobility at work has not decreased as much as in spring

The continued growth of export-oriented manufacturing in Europe is also helping the economy as a whole.

The German truck kilometer index, which according to the Federal Office for National Statistics correlates closely with industrial production, held up well at the beginning of November. Germany is by far the largest producer in the euro zone.

According to Shippeo, which collects real-time information on transport flows and the operation of power plants across Europe, the European supply chain is currently 94 percent full.

Stefan Schneider, chief economist at Deutsche Bank, said: “The European borders for goods will remain open, unlike April, which will keep the disruption of international supply chains in check.”

Container shipping fees for routes between China and East Asia to Europe – an indication of the volume of trade – continued to rise in October and early November, according to Freighto’s Baltic Index, as the early recovery of Asian economies from the economic impact of the virus supports growth in exports Eurozone.

Angel Talavera, Head of European Economics at Oxford Economics, said: “The industrial sector continues to perform comparatively better and the manufacturing recovery looks more solid right now.”

The divergence between the deteriorating European service sector and its resilient manufacturing activity will “continue to widen in the coming months,” he said, adding: “The hope is that this industrial resilience will help to partially blow the blow to economic activity in Europe balance [the fourth quarter]. ”

The outlook could also be helped by the potential breakthrough in Covid-19 vaccines announced on Monday, which sparked a global equity rally. On Tuesday the ECB said that “the long-term damage to the economy is likely to be minor. . . if a vaccine is found to ensure the shock does not last or recur ”.

The line chart of the index (seven-day moving average) showing the German truck toll has increasedLine chart of the index with increasing freight rates from East Asia to Europe