Steel and metal processing: third quarter production one percent higher year on year

lead to sustained higher production levels as it did last winter and therefore represents an upward risk for forecasts.

While sales on foreign markets are likely to return to their pre-crisis levels next year and continue to increase, domestic sales are set to tread water around about the level recorded in the years before the pandemic. All in all, production in 2023 is expected to be around three percent lower than this year.

Apart from the peaks in demand caused by Covid vaccines, the prospects have become bleaker according to the most recent figures. The hefty price increases are having an above-average negative impact on pharmaceuticals even though the industry is less affected by direct energy costs than the chemical industry, for example. However, as the chemical industry passes on a substantial part of its increased energy costs, as most other industries do, pharmaceutical companies that buy their inputs are among the industries most affected by the rising prices. This is all the more true as, unlike most other industries, these cost increases cannot be compensated by higher sales prices. Germany’s recently adopted Financial Stabilization of Statutory Health Insurance System Act will exacerbate the situation and the already huge cost pressure. The consequences of the amendments contained in the act regarding reimbursement arrangements will be even more serious. The new regulations will initiate a downward spiral in innovative drugs and curb innovations and investment markedly.

Contact: Dr Claus Michelsen / Phone: +49 30 2060 4120 / E-Mail: c.michelsen@vfa.de

Steel and metal processing: third quarter production one percent higher year on year

After increasing production by two percent year on year in both August and September, production in the third quarter of 2022 was also one percent higher than in the same period last year. These figures do not reflect actual developments as production last year was curbed by disruptions to supply chains. A comparison to the second quarter 2022 is therefore more useful and shows a drop in production among steel and metal processing companies in Germany of 0.5 percent. The industry nonetheless managed to reduce the gap to production levels last year to 0.7 percent in the first nine months year on year. The outlook for the last three months of the year is challenging. Incoming orders do not indicate a positive finish to the year and were seven percent down in the third quarter year on year and five percent down on the second quarter 2022. Business sentiment is not indicating a positive trend in the final quarter of the year either. Although the federal government’s announcement of a 200-billion relief package seems to have curbed the downward trend in expectations for the time being, the downward momentum in the rating of current business has accelerated. The lower capacity utilisation of production facilities matches the assessment of the business owners. The federal government must now rapidly and resolutely implement the proposals of the Expert Commission Gas and Heat presented in its final report of 31 October and support them with further measures to avoid disrupting the structure of value chains, the very foundation of our prosperity. The key points published on 2 November by the ministries involved and based on the commission’s proposal fall short of the mark in some places.

Contact: Holger Ade / Phone: +49 233 1958 821 / Mail: hade@wsm-net.de