By Svetlana Kovalyova
LONATO, Italy July 7 (Reuters) - Steel output in Italy, Europe's second-biggest producer after Germany, is likely to fall 45 percent in 2009 after a slide of 42-44 percent in the first five months, Italy's Federacciai industry association Chairman Giuseppe Pasini said on Tuesday.
"In 2009 we will see a fall of about 45 percent in steel production," Pasini told a news conference in Lombardy, a major steel-making region in Italy.
Italy produced 30.5 million tonnes of steel in 2008.
Pasini, who in May counted on a slight output recovery in the last quarter of 2009, said on Tuesday the situation in the sector, hit hard by global economic downturn, will remain difficult this year and was more likely to pick up in 2010.
Steelmakers around the world have cut output in response to the economic crisis which hit industrial demand.
Italian steelmakers laid off temporarily some 17,000-18,000 people, or about 30 percent of the 60,000 workforce directly employed by the steel industry, reduced working hours and will extend August holidays to four weeks instead of traditional 2-3 weeks, Pasini said.
"For now we have managed to avoid job cuts because social support schemes work," he said.
Government-backed incentive schemes for the auto industry, a major consumer of steel, have failed to give a strong boost to Italy's steel sector which needs new infrastructure projects to see a real recovery, Pasini said.
Pasini, also chairman of his family-controlled company Feralpi, said his group's steel output fell 28 percent in the first six months of this year and the full-year output fall was likely to be even bigger.
Feralpi, a leading Italian steel maker, produced about 2.6 million tonnes of steel last year, a record. The group has postponed bourse listing plans for a few years waiting for stock markets to improve, Pasini said.
(Editing by William Hardy)