The latest data concerning the trend in activity in steel using sectors in the EU confirm the dramatic impact of the financial and economic downturn on global demand for investment and intermediate goods.
Within the time span of one year, the business cycle went from “boom to bust”.
Since autumn ’08, order intakes in the EU steel using sectors have been falling strongly. As a result, total output in the steel using sectors declined by 11.2% in Q4’08.
The April ‘09 forecasts provided by the members of the EUROFER Economic Committee signal a sharp further drop in production during the first three quarters of this year. Orders books in industry are getting exhausted due to the lack of new order intakes.
Companies will remain stuck in survival mode, keeping operational stocks as low as possible and cutting investment to the bone as long as the slump in confidence and tight credit availability continues.
Consequently, the outlook for 2009 is very grim: total output in the steel using sectors – represented by the SWIP index – is expected to fall by almost 15% in 2009.
The outlook for 2010 has weakened also, with a lower level of activity than previously expected and only a minor improvement compared with 2009.
Source: EUROFER - European Confederation of Iron and Steel Industries
For full report, see attachment.