As part of Latin American Steel Congress, Alacero 53 activities, Dr Germano Mendes de Paula, PhD presented the research paper "Metal mechanic Chain in Latin America: economic relevance, opportunities and threats", that was developed in 2012 sponsored by Alacero.

Among key findings, research reveals the negative incidence of metal mechanic imports from China on employment creation in the 4 countries considered in the study (Argentina, Brasil, Colombia and Mexico).

Based on the input output matrix of each country, the paper quantifies that every USD 1 million of metal mechanic products imports, brings about the loss of 11 direct jobs. If indirect and induced effects are also considered, the loss totals between 46 and 64 jobs for every USD 1 million of metal mechanic products imported, depending on the considered country.

The most important threat to the metal mechanic chain is the commercial deficit with China, that grew from USD 8 billion in 2003 to USD 48 billion in 2010 and USD 64 billion in 2011.

During his presentation, Dr Mendes de Paula concluded that "The performance of the metal mechanic value chain has contributed to Latin America deindustrialization."

He also pointed out that manufacturing industry (being metal mechanic chain a part of it) has been decreasing its share among gross product of the region during the last years.

Additionally, the paper shows the great importance that metal mechanic value chain has for the economies of the researched countries. Based on each country economic information and input output matrixes, research can conclude that metal mechanic value chain represents about 16% of industrial gross product, creates high quality jobs, presents high forward linkages and strong multiplying effects.

The metal mechanic value chain is composed by 4 activities: automotive and transportation materials industries, infrastructure and construction sectors, primary, industrial and services activities investments that involve machinery and equipment acquisitions, and durable consumer goods production.

It generates more than 4 million direct jobs and almost 20 million indirect jobs in the considered countries. Also, the metal mechanic chain has elevated multiplying effects on diverse aspects of these economies.

Source - Alacero

(www.steelguru.com)