There are suggestions of advancing economic activity in the eurozone thanks in part to stable Europe Middle East and Africa (EMEA) manufacturing and steel sector outlooks, according to Moody’s. EMEA steel’s ebitda is forecast to grow 0.5% in the next twelve months. However, ebitda forecasts have been reduced for the US and Asian steel industries.

About 63% of Moody’s non-financial industry sector outlooks (ISO) based in EMEA were stable for the second quarter, but the ISO for EMEA Automotive Parts Suppliers moved to positive. This move is based on 5% organic revenue growth supported by underlying vehicle sales growth of nearly 3%.

“Auto manufacturing draws inputs from a wide variety of industries, so secondary effects – particularly in Europe’s Automotive Parts Suppliers, Manufacturing and Steel sectors – have significant positive implications for employment levels and for personal income expansion,” Moody’s says in a report sent to Kallanish. “Anticipation of this sort of activity keeps our outlook for the EMEA Steel industry stable.”

“While ongoing steel-related activity reveals weakness worldwide – particularly with our outlook for the Asia Steel industry turning negative in July, after the second quarter ended – we expect to see advancing activity for European steel used for producing vehicles and construction,” the agency continues. “In Europe the construction and auto sectors particularly benefit from sustained lower oil prices, which in turn improve consumer confidence and spending power.”

The outlook for the US steel industry was, however, changed in May to negative from stable. This was due to continued high import levels, declining capacity utilisation and plunging selling prices that are seen reducing industry profitability.

The “…deteriorating outlook” for the US steel industry led Moody’s to reduce by 25 percentage points its ebitda forecast to -30%, while the forecast for Asia Steel went earlier in July to -15% from flat. The growth forecast for exploration and production, meanwhile, improved to -10% from -15%, as worldwide crude oil prices increasingly looked to have bottomed out.