EU end-use activity to stutter till mid-2023: Eurofer

EU steel-consuming sector output is expected to contract by 0.9% on-year in 2023 as the economic deterioration seen since summer spills over into the first half of next year, says Eurofer. The economic and industrial outlook is expected to improve only from the second quarter of 2023 onwards.

This would be the second Steel Weighted Industrial Production (SWIP) recession since 2013, after the one due to the pandemic in 2020, while output was flat in 2019, Kallanish notes.

Output in H1 2022 saw only limited impact from the outbreak of war in Ukraine, rising 4.9% and 5.7% on-year in the first and second quarters respectively. The growth trend started as a result of the strong rebound following the easing of Covid restrictions in H1 2020.

Growth this year was driven by positive developments in the construction, mechanical engineering and transport sectors, while domestic appliances faltered. Moreover, automotive sector output returned to growth. However, progress has been hampered since summer due to energy prices and production costs rising to nearly unsustainable levels, Eurofer points out.

Steel-using sectors’ output is expected to expand by 1.9% in 2022 versus the previous forecast of 1.1%.

Construction and mechanical engineering output are forecast to rise 5.6% and 3.3% respectively in 2022 but decline 1% and 1.7% respectively on-year in 2023. Conversely, automotive and domestic appliances output are projected to fall 1.7% and 4.5% respectively this year but rebound 1.1% and 1.8% respectively in 2023.

Adam Smith Poland