At the SteelOrbis 2017 Spring Conference & 76th IREPAS Meeting held in Budapest on March 26-28 Jeroen Vermeij, director of market analysis and economic studies at the European Steel Association (EUROFER), enumerated some of the factors contributing to the current uncertainty in Europe: Brexit, elections in the EU, rising populism, lack of leadership, protectionism and the weakness of emerging economies. Stating that 2016 showed a healthy GDP growth for the EU, Mr. Vermeij said that in the second half of the year EU exports were on a rising trend with the weakening euro supporting exports. Also in 2016, the euro zone economy saw continued support from consumer spending, while less from investment and exports.
Regarding the outlook for 2017-18, the EUROFER official stated that the overall outlook seems moderately positive, but added that the EU is not immune to uncertainties, emphasizing that the question is how firm the remaining countries in the EU will be when the UK leaves the EU. On the other hand, he said that further growth is expected in private consumption and public expenditure in the coming period. EU steel-using industries are on track for moderate growth in 2017-18, with the automotive industry having a robust outlook despite decelerating sales and production growth, while the export markets are obscured by uncertainties.
Sharing EUROFER’s outlook for the EU construction industry, Mr. Vermeij said that 2016 was weaker than expected, though the strength of the residential sector is expected to continue in 2017-18. He expects more western European countries to recover, including France, with the UK remaining weak, and migrant inflows to stimulate social housing investment. The EU’s construction output is foreseen to see a 2.1 percent increase in 2017 and a 2.8 percent rise in 2018.
Mr. Vermeij also stated that steel imports arriving in the EU in 2016 increased by nine percent year on year, with the import volume in the last quarter of the year being at the highest quarterly level since the previous peak in 2007. Regarding steel demand in 2017-18, modest growth is foreseen for apparent consumption, with 0.7 percent growth in 2017 and 1.5 percent growth in 2018.