Conventionally, the economic impact of an industry is sustained by its contribution to GDP (Gross
Domestic Product), i.e. gross value added from the industry – the variance between the value of
output and middle inputs. Another prior indicator is the number of people who working in the steel
industry. These indicators help to detail the direct impact. This steel industry has a gross value
added of US$600 billion, which is 0.8% of international GDP and employs just over 6.5 million
people.
But the true expance of the steel industry’s impact on society and the economy would not be
complete without taking into contemplations the impact it has in its value chain both from input
suppliers and output customers. This is enormous when you consider how key steel as a material is
to so many industries like manufacturing, infrastructures, power and telecom. To estimate the
economic impact of our industry on the global economy, globally steel has commissioned Oxford
Economics.
The supply chain influence is called ‘indirect impact’. In the case of suppliers, it mentionrd to the
impact of the steel industry on the economy due to its purchases of inputs from not only raw
materials but also, constructed goods, energy and services. Downstream, a wide range of steel
using sectors, are in construction, automotive, mechanical machinery, transport, energy and others
hang on steel for their production activities.
There already exist various studies that calculate the impact of several economic sectors on a
particular national or regional economy for example recently the America Iron and Steel Institute
(AISI) for the USA and EUROFER for Europe. A usual background approach to such estimation is to
use input-output tables, which contain detailed data about the interactivity with relevant sectors.
There are some differences in procedure used, which are mostly related to the definition of the steel
industry and the way of handle inter-regional links.
The international steel studies may differentiate itself from the existing national studies by taking a
global approach. Trade and the possibility of impact is not limited to national borders and takes into
consideration global supply chains and steel using sectors. It underscore the complication of the role
which the steel industry plays in the global economy.
The global impact of the steel industry is US$3.9 trillion value added, and 97 million jobs globally.
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