Press & Media

Newsletter

Visitor Exhibitor Media
Recovery of economic activities is expected in the third quarter

2020-06-06    Author:   Source:www.worldsteel.org   Views:414    

Prospect of recovery


As most countries have been gradually reopening from their lockdowns since mid-May, recovery of economic activities is expected in the third quarter.


Even though all steel-using sectors are affected by the lockdown measures, the mechanical machinery and automotive sectors are highly exposed to a prolonged demand shock, as well as to disruption in global supply chains. Changes in working procedures in the steel-using sectors to fulfil the requirements of social distancing have been carried out. This change in the working environment will potentially lead to lower productivity and an extended production cycle.  


Construction


The construction industry in some countries suffered an abrupt halt of projects due to supply chain disruptions and a shortage of workers during the lockdown period. However, the decline in the construction industry will be less severe than during the financial crisis.


In the construction sector, social distancing measures seem to be more challenging to put in place, hindering post lockdown resumption of work. Prospects of new construction projects have also worsened due to the deteriorated balance sheets of consumers and businesses.


Governments might try to put a focus on new construction projects in an effort to support demand, but significantly worsened government balance sheets may confine the ability to carry out public infrastructure investments.


Mechanical machinery


The mechanical machinery sector, where supply chains are some of the longest in manufacturing, has experienced significant logistical bottlenecks and supply chain issues.


At the same time, mechanical machinery will experience a substantial decline in demand in 2020 as investment projects are put on hold or cancelled.


The sector will face challenges in demand recovery in the longer term due to a bleak outlook for investment. However, sectors like agricultural and construction machinery will recover faster.


Automotive


The automotive industry is the biggest victim of the COVID-19 crisis among the steel-using sectors. In 2020 the automotive industry is expected to experience a loss of sales of 20% on top of the losses in the past two years. 


Recovery to pre-crisis levels will take several years due to income growth and remote working, but safety concerns might boost demand for passenger cars in the short term.


Furthermore, the supply disruptions may continue beyond the lockdown period as liquidity problems will deter the restart not only of car producers, but also of auto part suppliers.


The transition to electric vehicles will continue and likely accelerate post-pandemic.


Steel China, worldsteel, Fastener Expo Shanghai, International Fastener Show China


Previous article:New infrastructure, New opportunity!

Next article:Worldsteel Short Range Outlook June 2020

Newsletter

Visitor Exhibitor Media

Contact

Shanghai Afastener Exhibition Co., Ltd.

Tel:+86 (0)20 8985 1867

E-mail: Info@afastener.com