Macroeconomic and sector-specific conditions

Macroeconomic conditions

According to current estimates, global economic growth this year will remain at a similarly low level to 2015. In June, the World Bank lowered its growth forecast from January by 0.5 percentage points to 2.4 per cent. In particular, the United States and Japan plus emerging markets and developing countries that export commodities – including Brazil and Russia – have been weaker than initially assumed. Moreover, countries that import commodities have not benefited from the low prices to the extent expected.

Faltering growth was accompanied by increasing uncertainty about the effectiveness of expansionary monetary policy in industrialised nations and about the sharp rise in personal debt in many developing countries and emerging markets. By contrast, the situation in China appears to have stabilised following a weak start to the year: industrial output and foreign trade have shown a positive trend again recently.

The recovery in the eurozone continued at a modest pace, driven mainly by strong domestic demand. Germany recorded robust growth fuelled by higher consumer spending and capital investment.

The vote by the British people in favour of leaving the European Union increased economic risk towards the end of the reporting period. However, the consequences of the UK referendum are almost impossible to predict at present. The ifo Institute of Economic Research expects Germany’s upturn to continue, although economic growth in 2016 is likely to be 0.1 percentage points lower because of the referendum result.

Sectoral conditions

Sales markets

The global market for industrial trucks slightly expanded in the second quarter. Primarily driven by growth in Europe, the number of trucks sold rose by 1.8 per cent globally.

The rate of growth was 2.7 per cent in the first half of the year. Western Europe saw double-digit increases in sales in the first half of the year on the back of a continuing robust uptrend in Germany and France as well as healthy gains in Spain and Italy. The United Kingdom was the only market with a pronounced reluctance to invest in the second quarter. Eastern Europe showed strong growth as well and amongst others benefited from Russia’s recovery. In North America, order numbers hovered slightly below the prior-year level, whereas South America saw a sharp decline, mainly due to the ongoing downward trend in Brazil. China registered slight growth in the first half of the year that was primarily attributable to the tightening of emissions regulations and the related increase in orders in the first quarter.

Broken down by product segment, the bulk of the growth was generated by warehouse trucks, followed by electric forklift trucks. Demand for trucks powered by internal combustion engines (IC trucks) continued to fall sharply. > TABLE 02

Procurement markets and conditions in the financial markets

Prices for steel, which is the most important raw material for the KION Group, and for copper remained at a very low level in the first half of the year and their average was considerably lower than in the corresponding period of 2015. Oil prices rose steadily but were still lower on average than in the prior-year period.

Overall, currency effects had a negative impact on exports in the first six months of 2016. The euro rose slightly against the Chinese renminbi and pound sterling during the half-year period. However, pound sterling and the euro came under strong pressure at the end of the second quarter due to the outcome of the UK referendum. The Brazilian real persisted at a low level.