Wholesale Cnc Grinding Services - Industry influence – Basile

Industry influence

Defense and Aerospace Industries:

◆ Under-investment and free-riding in defense, backed by U.S. security assurances, has been a major problem in Europe for years, with few European countries meeting the NATO-mandated defense budget of 2 percent of GDP. Germany has now announced defense spending will exceed 2% of GDP, and other countries will follow. Modernization efforts to upgrade conventional combat capabilities across the continent will progress steadily.

◆ The EU’s decision to provide military assistance to Ukraine marks a major policy shift for the EU as a medium- and long-term soft power player. Efforts to advance defence cooperation in the EU have been hampered by competing priorities, but this clash at the bloc’s door has fundamentally changed the EU countries’ vision for the future. Fiscal budgets are under pressure due to fiscal pressures during the pandemic, with countries seeking initiatives that make the best use of existing budgets, and there may be more efficient cooperative spending among European allies.

◆ Western sanctions against Russia have affected global aerospace and defense supply chains, and the likelihood of Russia selling weapons to fast-growing international markets such as the Middle East is declining. Ukraine’s huge national aerospace industry will be hit hard, as will hopes for a quick recovery for the entire European aerospace industry after the pandemic.

Apparel Industry:

◆ Russia is the world’s tenth largest apparel market in 2021, with sales reaching $4.78 billion, while the Ukrainian market has sales of $3.5 billion. Inditex, H&M, Nike and Adidas lead the market, and Russia is an important market for these international apparel brands, but the difficulty of doing deals under sanctions will affect operations. International clothing brands and retailers with operations in Russia have already started withdrawing. Both Nike and ASOS have stopped online sales in Russia.

◆ Rising commodity prices resulting from the conflict in Ukraine will put pressure on the apparel industry across the supply chain, affecting textile prices and further putting inflationary pressure on consumers, which will lead to a shift in consumption from apparel sourcing to more important commodities.

While Russia and Ukraine will certainly be the worst affected, the pressure is not unique to consumers in these two countries, as their participation in global exports of commodities and textiles will allow the impact to spread to markets beyond continental Europe.