Eurostat released positive preliminary estimates of GDP growth in the European Union for Q1 2016, and it appears that the eurozone’s economy has finally surpassed its 2008, pre-eurozone crisis value. The road to recovery has been slow and is far from over; unemployment rates remain high in many countries, austerity measures are becoming less prominent but still exist, and inflation turned negative in April. Portugal in particular remains at risk for further crises, and the potential of a Brexit casts a dark shadow.
The impact of the Eurozone crisis continues to be felt in our 2016 medtech market analyses. Budget constraints continue to limit spending. Facilities still delay capital equipment purchases. For example, austerity measures across Europe and health care policy changes in Italy and Spain have affected diagnostic imaging system sales. Dentists in Europe have been less able than their US counterparts to invest in chairside dental CAD/CAM technology, leading to a greater reliance on dental laboratories for the creation of dental restorations. The ongoing amalgamation of smaller health care facilities in an effort to consolidate spending and reduce costs has also limited the number of facilities purchasing capital equipment in Europe.
The outlook is improving though. Volumes of elective procedures (which have been particularly hard hit) such as breast reconstructions, dental implant procedures, and crown and bridge placements will generally accelerate as the European economy continues to improve and disposable incomes rise. Effective new technologies—even premium-priced ones—can expect quick uptake in Germany, even if adoption may still be limited in Italy and Spain.
Many of the European economies are slowly climbing back to safer ground, but the next few months and years could potentially bring a lot of new changes to the European market, and their full impact is yet to be determined. Britain’s position could change dramatically depending on the June 23 referendum vote and what kind of trade arrangements it is able to obtain if it leaves. Changes to European medical device regulations are also under negotiation, and these will significantly alter the medtech device landscape in the upcoming years.