Europe COVID-19 Tracker Free to View Economics - Europe

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Europe COVID-19 Tracker Free to View Economics - Europe 25 August 2021 Europe COVID-19 tracker Free to View Economics - Europe Past peak growth; tourism returns Infection rates and ICU occupancies remain broadly stable Fabio Balboni Senior Economist Data are pointing to slowing growth momentum... HSBC Bank plc ...but the tourism season is finally showing signs of revival Slight up-tick in cases The number of cases are still broadly stable across Europe, although they are rising more rapidly in Germany and the UK, and intensive care unit occupancy rates for COVID-19 patients remain relatively contained. Most European countries are getting closer to the vaccination target of 70% of the population, which they had set out to meet by the end of the summer. Meanwhile, the debate is continuing on early signs of waning immunity from vaccines and the efficacy of vaccines in preventing transmission (FT, 19 August). Data from Israel are worrying in terms of possible waning protection (Chart 9-10). The French Health Minister said citizens over-65 are likely to be offered a booster shot starting in September (Anadolu, 23 August). UK Health Minister Sajid Javid said in early August that a booster campaign for over-50s would kick off in early September (even though the press is reporting that boosters may be limited to most vulnerable; Telegraph, 19 August). Past peak growth The August PMIs indicated that the pace of service sector expansion eased slightly, both in the eurozone and the UK. The manufacturing PMIs also dipped again, even though there are some early signs of alleviating supply-side bottlenecks (Chart 18). The ifo survey in Germany gave a more concerning signal, with expectations surprising significantly to the downside and pointing to fading growth momentum, possibly also related to the slowdown in Asia. So it seems we might be past the peak in terms of sequential growth rates in Europe. Even then, due to the stronger-than- expected Q2, we increased our 2021 eurozone growth forecasts to 4.9% from 4.4%, while we nudged down our UK growth forecasts to 6.7% from 7.1%. Employment indicators, though, remain solid on both sides of the Channel. In the eurozone, short- time worker numbers are falling fast – we estimate there were some 5m workers in the eurozone in July, down from 10m in June (Charts 25-26) – which bodes well for the ongoing winding down of the schemes. There are increasing signs of recovery in tourism, particularly domestic, which might be starting to generate some pockets of inflationary pressures. In Spain, the nights spent in tourist accommodation rose sharply in July, reaching 60% of pre-crisis levels. In Italy, the tourism and trade association CNA registered a 20% rise in domestic tourists in July relative to 2019 (26 July). Even foreign travel is starting to resume. Despite fairly elevated COVID-19 cases, in the first half of August international passenger traffic in Greek airports stood at 81% of 2019 all-time high levels, from 66% in July. Traffic at the Athens airport was at c70% of pre-pandemic levels, with the most popular islands doing even better, at 85%, and Santorini above 2019 levels (Ekathimerini, 23 August). Data from International aviation show a significant recovery of travel across the board within the continent, though less so for the UK, at least so far (Charts 29-34). This is an abridged version of a report by the same title published on 25-Aug-21. Please contact your HSBC representative or email [email protected] for more information. Disclosures & Disclaimer Issuer of report: HSBC Bank plc This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at: https://www.research.hsbc.com Free to View ● Economics - Europe 25 August 2021 COVID-19 cases relatively stable this week 1. European infection numbers have largely stabilised... COVID-19 cases* in the eurozone big 4 and UK 160000 160000 120000 120000 80000 80000 40000 40000 0 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Germany France Italy Spain UK Source: Refinitiv Datastream, HSBC. Note: *7-day moving average. 2. ...even though there were noticeable up- 3. New cases are rising across the board in ticks in Germany and the UK this week Germany, but less among the elderly 7dma Daily COVID-19 cases per 100k of population 7dma 000s Germany : New COVID-19 cases by age (7 dma) 000s 60 60 10 10 50 50 40 40 8 8 Thousands 30 30 6 6 20 20 10 10 4 4 0 0 2 2 UK Italy Spain Ireland France Norway 0 0 Belgium Sweden Portugal Germany Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Switzerland Netherlands 0-4 5-14 15-34 7-day to 17-Aug 7-day to 24-Aug 35-59 60-79 80< Source: Refinitiv Datastream, HSBC. Note: Weekend numbers are reported as 0 so Source: Macrobond, HSBC. “7-days to” does not include Saturday and Sunday. 4. ICU occupancy rates by COVID-19 patients 5. ...and have eased slightly in Spain after remain low relative to previous waves... last week's spike Total COVID-19 related ICU patients (7 dma) Total % Share of intensiv e cart units occupied by % 8000 8000 COVID-19 patients in selected Spanish regions 50 50 6000 6000 40 40 30 30 4000 4000 20 20 2000 2000 10 10 0 0 0 0 Spain Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Madrid Catalonia Germany France Italy C. Basque As of 9-Feb As of 10-Aug As of 17-Aug As of 24-Aug UK* Spain Source: Macrobond, HSBC. Note: *medically ventilated. Source: El Diaro, Ministry of health, HSBC We acknowledge the assistance of Yash Dewan, HSBC Bank plc, in the preparation of this report. 2 Free to View ● Economics - Europe 25 August 2021 Vaccinations aren’t eliminating COVID-19 6. Overall, European countries show relatively high rates of vaccination… Number Number of v accine doses administered per 100 people Number 180 180 150 150 120 120 90 90 60 60 30 30 0 0 UK (22 Aug) (22 UK Aug) (23 US Italy (23 Aug) Italy Malta (22 Aug) (22 Malta Spain (22 Aug) (22 Spain Ireland (22 Aug) (22 Ireland France (22 Aug) (22 France Poland (22 Aug) (22 Poland Finland (23 Aug) (23 Finland Aug) (23 Greece Norway (22 Aug) (22 Norway Sweden (20 Aug) (20 Sweden Bulgaria (23 Aug) (23 Bulgaria Portugal (23 Aug) (23 Portugal Romania (22 Aug) Romania Denmark Aug) (22 Denmark Germany (22 Aug) (22 Germany Source: Our World in Data, HSBC. 7. …but the speed of vaccination continues 8. ...with many European countries now to slow, although it is recovering in France… getting closer to the 70% target Per mn Daily COVID-19 v accine doses Per mn % Share of population fully v accinated against COVID-19 % 14000 14000 70 70 12000 12000 60 60 10000 10000 50 50 8000 8000 40 40 6000 6000 30 30 4000 4000 20 20 2000 2000 10 10 0 0 0 0 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Germany France Italy EU Germany France Spain UK US UK Spain Italy Source: Our World in Data, HSBC. Source: Macrobond, HSBC. 9. Despite high vaccination rates, Israel is 10. ...and the average age of people ending now showing soaring case numbers... up in hospital has increased again after the initial decline 000s. Israel: COVID-19 cases and vaccinations No. Years Israel: Av erage age of COVID-19 Years 10.0 80 hospitalisations 75 Vaccinations 75 7.5 60 70 begin 70 Thousands 65 65 5.0 40 60 60 2.5 20 55 55 0.0 0 50 50 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21 New cases - smoothed (LHS) 45 45 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Vaccines administered/100 people (RHS) Source: Macrobond, Our World in Data, HSBC. Source: Israeli government, HSBC. 3 Free to View ● Economics - Europe 25 August 2021 Activity levels stabilising at around pre-pandemic levels 11. UK mobility has started to increase 12. …and remains on a gradual upward again… trend also in the eurozone Index UK: Stringency of restrictions Dev iation Index Eurozone: Stringency of restrictions Dev iation and retail mobility from baseline and retail mobility from baseline 0 20 0 20 20 0 20 0 40 -20 40 -20 60 -40 60 -40 80 -60 80 -60 100 -80 100 -80 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Stringency score (LHS, inverted) Mobility (RHS) Stringency score (LHS, inverted) Mobility (RHS) Source: Google mobility, Oxford COVID-19 Government response Tracker, HSBC. Source: Google mobility, Oxford COVID-19 Government response Tracker, HSBC 13. Retail and recreation activity is back to pre-pandemic levels in many places… % from baseline Europe and US: mobility data - retail and recreation* % from baseline 20 20 0 0 -20 -20 -40 -40 -60 -60 -80 -80 -100 -100 Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Germany France Italy Spain UK Sweden Norway US Source: Google, HSBC. Note: *7-day moving average. 14. …while the holiday season may be playing a role keeping people away from work % from baseline Europe and US: mobility data - w orkplaces* % from baseline 20 20 0 0 -20 -20 -40 -40 -60 -60 -80 -80 -100 -100 Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Germany France Italy Spain UK Sweden Norway US Source: Google, HSBC.
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