Steel output in the second quarter of 2011 continued its gradual upward recovery, but there are signs it is beginning to level off as demand from some sectors weakens.
The latest figures from UK Steel, a division of manufacturers organisation EEF, revealed production in the second quarter of 2011 averaged 193,000 tonnes per week. This was 2.3% higher than the first quarter of 2011 (189,000 tonnes per week).
Despite the gradual increase, however, compared to the same quarter last year (198,000 tonnes per week), production was 2.5% lower. Steel production in the UK is still around one third below pre recession levels.
The latest data is marked by the increasing divergence between sectors. Whilst demand from automotive, energy and aerospace remains strong demand from other sectors, in particular construction, remains weak in the wake of the banking crisis and, more recently, in response to cuts in infrastructure and public spending across the European Union.
Ian Rodgers, director of UK Steel said: “After a strong recovery last year, we are now seeing signs that demand is beginning to level off. This may be due to more uncertain economic conditions, but also a divergence in demand from key sectors. With cuts in public spending across Europe improvements from the construction sector will be unlikely for some time to come.”
