In a V-shpaed recession, it is projected that European manufacturing companies will have a positive EBIT margin of four percent, already a significant decline from the pre-pandemic EBIT margin of seven percent. The V-shaped recession is the least severe type of recession. Different types of hypothetical economic scenarios paint a mixed picture of the effects of the COVID-19 pandemic on earnings produced by European manufacturing companies. Depending on the severity of the recession, the amount of profit a company would generate differs. A U-shaped recession would result in an EBIT margin contraction of two percent, while the most severe type of recession, the L-shaped recession, would result in an EBIT margin slump of 19 percent. Thus, in the last two scenarios, companies would face significant losses in profit compared to the pre-pandemic status.
Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020
* Recession types:
V-shaped recession: Successful implementation of measures to curb the spread of the virus and COVID-19 lasts for three to four months. Revenue streams decline in the second quarter, before recovering quickly in the third and fourth quarters.
U-shaped recession: COVID-19 will last for 6-12 months due to mutations of the virus and seasonal outbreaks. Revenue streams drop in the second and third quarters, but recover in the fourth quarter.
L-shaped recession: in this most severe scenario, COVID-19 will last for more than 12 months due to mutations of the virus, its seasonality, and unsuccessful curtailment measures. As a result, declining revenue streams persist throughout the fourth quarter.
Profit from the additional features of your individual account
Currently, you are using a shared account. To use individual functions (e.g., mark statistics as favourites, set
statistic alerts) please log in with your personal account.
If you are an admin, please authenticate by logging in again.
Learn more about how Statista can support your business.
Oliver Wyman. (November 23, 2020). Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020 [Graph]. In Statista. Retrieved October 07, 2024, from https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/
Oliver Wyman. "Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020." Chart. November 23, 2020. Statista. Accessed October 07, 2024. https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/
Oliver Wyman. (2020). Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020. Statista. Statista Inc.. Accessed: October 07, 2024. https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/
Oliver Wyman. "Earnings of European Manufacturing Firms in Different Types of Recessions Caused by Covid-19, as of 2020." Statista, Statista Inc., 23 Nov 2020, https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/
Oliver Wyman, Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020 Statista, https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/ (last visited October 07, 2024)
Earnings of European manufacturing firms in different types of recessions caused by COVID-19, as of 2020 [Graph], Oliver Wyman, November 23, 2020. [Online]. Available: https://www.statista.com/statistics/1192536/earnings-european-manufacturing-firms-during-recession-covid19/