THE ECONOMIC IMPACT OF THE EU STEEL SECTOR Doug Godden Lead Economist, Oxford Economics 24 th April 2018
INTRODUCTION
Introduction Overview of the report The size of the 22-country EU steel sector in 2016. Resulting impact on the wider EU-28 economy. Individual country results for all 28 member states.
Introduction Overview of this presentation The EU steel industry s own economic activity. What we mean by its wider economic footprint. The size of the wider economic footprint.
THE EU STEEL INDUSTRY S OWN ACTIVITY
The EU steel industry s own activity EU steel industry production ( NACE 24.1: Manufacture of basic iron and steel and of ferro-alloys ) Values in 2016 Value of production ( billion) 123.5 Production value as % total EU manufacturing 1.87%
The EU steel industry s own activity EU steel industry production Value of production compared with other EU industries
The EU steel industry s own activity EU steel industry production Breakdown of production value by major cost component Productionto-GVA ratio is 6.0
The EU steel industry s own activity EU steel industry production and GVA ( NACE 24.1: Manufacture of basic iron and steel and of ferro-alloys ) Values in 2016 Value of production ( billion) 123.5 Production value as % total EU manufacturing 1.87% Gross value added (GVA) ( billion) 20.7 GVA as % total EU manufacturing 1.13%
The EU steel industry s own activity EU steel industry GVA per job Industry GVA per worker in context GVA per job is 7% above the manufacturing average
The EU steel industry s own activity EU steel industry production, GVA and jobs ( NACE 24.1: Manufacture of basic iron and steel and of ferro-alloys ) Values in 2016 Value of production ( billion) 123.5 Production value as % total EU manufacturing 1.87% Gross value added (GVA) ( billion) 20.7 GVA as % total EU manufacturing 1.13% Employment (headcount) 320,392 Jobs as % total EU manufacturing 1.06%
The EU steel industry s own activity EU steel industry jobs Employment compared with other EU industries
The EU steel industry s own activity EU steel industry employment Industry jobs by country
The EU steel industry s own activity EU steel industry employment Steel sector jobs as a share of all national jobs Relative impact highest in Luxembourg, Slovenia & Slovakia
THE WIDER ECONOMIC FOOTPRINT EXPLAINED
The wider economic footprint explained Different channels of economic impact Direct and indirect impacts
The wider economic footprint explained Different channels of economic impact Total impact = direct + indirect + induced impacts
The wider economic footprint explained Capturing cross-border feedback effects The Oxford Economics Global Impact Model
THE INDUSTRY S WIDER ECONOMIC FOOTPRINT
The industry s wider economic footprint Procurement of inputs from other industries Procurement by product type Indirect Impact Purchases of inputs from suppliers; Suppliers own supply chains
The industry s wider economic footprint supports significant activity in EU supply chains Indirect GVA impact by industry of supplier Indirect Impact Purchases of inputs from suppliers; Suppliers own supply chains
The industry s wider economic footprint Induced impacts support further activity Pattern of induced GVA relative to indirect GVA Indirect Impact Purchases of inputs from suppliers; Suppliers own supply chains
The industry s wider economic footprint Total impacts greatly exceed direct impacts The European steel industry s economic footprint across the EU Indirect Impact Purchases of inputs from suppliers; Suppliers own supply chains
The industry s wider economic footprint Or in technical terms, the multipliers are very high Multipliers for GVA and jobs Ratio of direct plus indirect impact to direct impact ("type I multiplier") Ratio of total impact to direct impact ("type II multiplier") Multiplier for GVA 4.5 6.2 Multiplier for jobs 5.6 7.7
The industry s wider economic footprint Total GVA impact Total GVA impact relative to the GVA of selected regions
The industry s wider economic footprint Total employment impact Total jobs impact relative to jobs in selected regions
The industry s wider economic footprint Total employment impact Total jobs impact by broad industrial sector
The industry s wider economic footprint Total employment impact Total jobs impact by country
The industry s wider economic footprint Total employment impact Total jobs impact as a share of all national jobs Relative impact highest in Luxembourg, Slovenia & Finland
CONCLUSION
Conclusion Key points The industry s own (direct) GVA is 20.7 billion This supports 320,000 jobs The total value of production is six times GVA This ratio is high by typical industry standards It results in large indirect and induced impacts The total GVA impact is 128 billion This is more than the GVA of the Berlin region Some 2.5 million EU jobs are supported in total This is 7.7 times the number in the industry itself
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