Eurofer evaluates economy and steel market

Eurofer evaluates economy and steel market

Eurofer has published its report on the economic and steel market situation in Europe and the forecast for fourth quarter. In the report, Eurofer underlines the impact of decreasing investments on the economy. It is also underlined that the investment growth rate had been -0.2% per quarter during the first half of year 2002, but is expected to pick up to 1% in the second half of the year. Inflation forecast points out to 1.9% for the year, down from an estimated 2.2% in 2001. This is mostly based on the strengthening of the Euro to curb inflation. Meanwhile Eurofer's report also warns that financial developments, such as weakening dollar and the declining stock prices, may jeopardize economic recovery. Having said that, Eurofer forecasts a 1.3% GDP growth in the Eurozone this year, and a better growth of 2.3% in 2003. Eurofer is of the opinion that the economy should see some recovery during the second half of the year as industrial production revives. The construction industry output is expected to rise in the EU. The automotive industry is also expected to be better than the first half of the year, however Eurofer does not expect the total automotive industry output to be higher than last year. Mechanical engineering sector does not possess bright signs of recovery, just as metalware industry where Eurofer sees hope only if industrial production in Europe reall recovers. The report also stipulates the expectation of increased steel imports due to price rises, strengthening Euro and the risk of diversion from the US during the second half of the year. Also steel exports should increase in the second half according to Eurofer as the current state of exports is literally terrible, and global economic conditions are expected to improve as well. The imports are estimated to increase 1% in 2002 compared to last year and exports to show an overall decrease of 3% versus 2001. There is no expectation of an increase in crude steel output of the EU.