The international credit ratings agency Moody’s has said in its annual outlook report on the European steel industry that the outlook for the European steel industry is negative for the coming 12 to 18 months. The key drivers of the negative outlook are a combination of weaker macroeconomic conditions and waning consumer confidence, which are undermining demand and could lead to a two percent contraction in steel consumption into 2020.
"Steel demand from Europe's auto companies, which are the second largest steel consumers after construction, will weaken into 2020 as vehicle sales fall. This will particularly hurt flat steel producers like ArcelorMittal, Thyssenkrupp and Tata Steel for whom automakers are important customers," said Goetz Grossmann, a Moody's assistant vice president-analyst. Vehicle sales in the EU are expected to decrease by two percent in 2019 and by three percent in 2020.
According to Moody’s, although demand in the European construction industry remains healthy, this will soften in 2020 as confidence deteriorates. The main growth driver will be a buoyant civil engineering sector.