The negative trend of economic development in Europe seems to have transgressed its lowest point. However, analysts of the European Confederation of Iron and Steel Industries, Eurofer, expect recovery to be moderate. Gross domestic product (GDP) development seems stable, with an estimated 1.5 percent increase for 2001 and a 1.3 percent increase forecasted for 2002. While private consumption has remained relatively steady and has continued as the main engine of growth, this could not fully compensate for the drop in investment activity. Overall, the industry in Europe remains poor, and production levels are expected to remain below that of 2001. However, some signs seem to indicate a gradual recovery. With inventories already downsized, progress for the rest of the year reflects largely on the underlying growth in demand. Eurofer analysts point out that the leading indicators have picked up moderately, in particular, those reflecting business confidence and the purchasing managers index. Investment is expected to pick up from a quarterly rate of -0.2 percent during the first half of this year to about 1 percent in the second half of 2002. Unemployment, which fell from 8.4 percent in 2000 to 7.7 percent in 2001, is expected to remain stable at 7.8 percent. Inflation remained higher than estimated at 2.2 percent in 2001 and is expected to drop to 1.9 percent in 2002.
展开▼
