Output in the European Union (EU) mechanical engineering sector fell 2.8 percent year on year in the third quarter of 2012 and a further drop of around two percent year on year is projected for the final quarter of the year, said the European Steel Association (EUROFER) in the first quarter report of its ‘Economic and Steel Market Outlook 2013-2014'. EUROFER estimates an overall one percent reduction in mechanical engineering production in the EU in 2012, compared to the previous year.
Accordingly, in 2012 activity in the EU mechanical engineering sector managed to withstand rising economic pressures during 2012 relatively well, with the UK, Germany and most central European countries strengthening their positions as parts and components suppliers in recent years. However, the synchronized weakening in domestic and export demand for machinery and equipment in the second half of last year and the depletion of order books resulted in a more pronounced drop in output.
EUROFER's first estimates for 2013 are for output in the mechanical engineering sector to stabilize at around the 2012 level. EU investment in machinery and equipment is forecast to fall by another 1.8 percent this year following the 4.3 percent year-on-year drop in 2012. According to the report, domestic demand may remain weak in 2013, while exports could revive due to the expected economic recovery in the emerging regions. EUROFER has predicted that EU mechanical engineering activity will rise by around 3.5 percent year on year in 2014.
The mechanical engineering sector is responsible for 14 percent of total steel consumption of the EU, compared to the 35 percent share of the construction sector and the 18 percent share of the automotive sector.
