Article from Steelorbis.com

     One determinant of the growth of any industry is the expansion of demand and the supply structures. In the news given, the growth of the Philippine Iron and Steel Industry is explained by the behaviour of its dominant consumer, which is the Construction Industry. Last year, the Iron and Steel Industry posted growth around 3-5%, which is lower than the previous year. This is highly caused by a 6.4% decline of the growth of the Construction Industry. A rebound of at least 10% however is expected to happen in 2012 due to the revitalization of the domestic housing. The aggressiveness of real state giants, such as Ayala, DMCI, and Megaworld, is the ones behind this revitalization.

     The Executive Director of University of Asia and the Pacific Capital Market Research, Dr. VictorAbola, asserted that the country is at the early stages of a construction boom given the continual recovery of the housing sector in 2011 and the robustness of the real estate sector supported by the OFW remittances and an improved confidence in the property industry. He also underscored the fact that the demand for housing would continue to remain strong due to the fact that there is a 3 million housing backlog that needs to be filled. With that note, the expected 10% growth in Iron and Steel Industry must not be far-fetched.

     Relating the news to the objective of our study, which is capturing the value added of the Iron and Steel Industry, monitoring the sectoral demand for iron and steel products plays a crucial role. Studying the major consumer of these products will help us formulate solutions about improving the demand structure—it can be by addressing issues related to constructions, for example, or attracting new customers. And this news contributes to the process of formulating solutions.

Authors:
Agas, Tyrone Dale
Molleno, Paolo Miguel
Panganiban, Danica Leane



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