Overall, the downstream steel industry has suffered relatively less losses due to the lockdown, and the recovery speed is also faster than that of the hotel, aviation, and entertainment industries. However, due to the bankruptcy of a large number of small and medium-sized enterprises during the epidemic, it has had a long-term impact on the supply chain of the downstream steel industry and will to some extent offset the rebound in the manufacturing industry.
The construction industry will experience structural changes due to its strong resilience to impact
Faced with the impact of the epidemic, many governments have prioritized the implementation of public construction projects, thus maintaining relatively strong resilience in the construction industry. With the relaxation of lockdown measures, the construction industry in developed economies has been able to continue to recover under the increasing investment in infrastructure, the release of backlog demand, and a relaxed credit environment.
In many emerging economies, the construction industry will shrink in double digits in 2020, especially Türkiye, Mexico and Brazil will fall into deep recession and face financing problems. In addition, due to the Chinese government's stimulus measures, it is expected that China's construction industry will rebound strongly.
In the coming years, it is expected that infrastructure investment will drive global construction industry growth, especially in developing economies. The green recovery plans implemented by European countries may drive the growth of infrastructure investment in developed economies. However, the financing difficulties caused by the deterioration of government revenue and expenditure and the expected pressure on oil prices may hinder investment.
In the long run, with the transformation of demand patterns for office and housing space, as well as significant changes in urban planning and related building regulations, the global construction industry will experience structural changes.
The automotive industry is severely hit and the supply chain will be readjusted
The global automotive industry has been greatly affected by the pandemic. In April, the production of automobiles in many countries decreased by 70% to 90% year-on-year. Although the supply side issues were quickly resolved in the later stage, the recovery of the automotive industry was suppressed by the slow recovery of demand after the blockade. In the second quarter, global car production fell by 34% year-on-year. Even though China's robust demand has accelerated the recovery of the automotive industry, overall from January to August, China's motor vehicle production is still 9% lower than the same period in 2019. The situation in other countries is even more severe. From January to August, the production of cars in Germany and the United States decreased by more than 30% year-on-year. During the same period, India's passenger car production decreased by 46.1% year-on-year.
At the same time, the automotive industry is undergoing large-scale restructuring, the supply chain will be readjusted, the urban travel mode will change, and the transition to electric vehicles will continue.
The situation in the mechanical equipment industry is not optimistic, and the mid-term recovery is limited
Due to supply chain disruptions and reduced orders during the lockdown period, the mechanical equipment industry has suffered a serious blow. In the first quarter, China's mechanical equipment industry experienced the earliest contraction, and in the second quarter, the mechanical equipment industries of the European Union, the United States, and Japan also experienced contraction one after another. Since May, the downward trend of output in the mechanical equipment industry has slowed down, but the situation in most countries is still not optimistic. Due to a decline in profits and insufficient confidence, investment projects in the mechanical equipment industry have been delayed or withdrawn. After experiencing the initial industry rebound, the recovery speed of the industry has been slow. But China is an exception. In the first 8 months, China's mechanical equipment industry