Analysis of the recovery sector in 2014

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This FuturEnviro platform invites us to analyse the year 2014 in the recovery sector and offer a forecast for 2015. A difficult task and one I feel that nobody is truly capable of undertaking, but let us try.

2014 was a year in which consumption, and consequently the industry, continued to be stagnant, meaning that raw material volumes were insufficient for recovery companies: metals, iron, paper, etc. Given this scenario, companies operating in the sector have focused on cost reduction, process optimisation and commercial diversification. Paper and board prices enjoyed a certain stability, iron prices fell and metal prices recovered in the final quarter, favouring the sale of expensive stock. Banks continued to reduce risk and raise interest rates, which was of no benefit in terms of reactivating the economy. In summary, it was a year spent crossing the desert in search of light at the end of the tunnel of economic crisis.

2015 has begun with successive decreases in iron prices and this downward trend is expected to continue until the end of the second quarter at least. Behind this scenario lies the dark cloud of overproduction on the part of the world’s leading producer and weak consumption.

A number of factors may make 2015 a year of change towards positive trends. A gradual increase in access to bank loans is expected in the business market as well as in mortgage and consumption loans, etc, as a result of the greater liquidity of banks and European Central Bank support lines. With this will come an increase in house sales (boosting construction), car sales, capital goods investment and consumption in general. All of this has a practically direct effect on our business.

It is as common to fall into vicious circles that drag the economy backwards like a landslide (2008-2014) as it is to enter into virtuous circles that drive the economy upwards through simple contagious euphoria (2015…… ). In any case, the mere fact that there is a clear change in economic trends following so many years of recession is encouraging in itself.

Xavier Riba, President of the Catalan Recovery Guild

Article published in: FuturENVIRO March 2015