Macroeconomic and sector-specific conditions

Macroeconomic conditions

According to the latest estimates, global economic growth is persisting at a similar level to 2015. The October World Economic Outlook of the International Monetary Fund (IMF) predicts global growth of 3.1 per cent for 2016 as a whole. The current outlook for most of the large markets has improved or held steady compared with the July forecast. The exception is the United States, whose predicted growth has been revised downwards.

Germany and the rest of the eurozone benefited from a healthy domestic economy in the first three quarters of the year; the IMF’s outlook for this year has been raised slightly compared with the July forecast. The biggest risk at present is considered to be the consequences of the United Kingdom’s exit from the EU, which remain unclear. According to early estimates, the increased uncertainty in the third quarter resulted in a decrease in the UK’s own economic output.

Despite strong consumer spending, growth in the United States is likely to be lower in 2016 than originally assumed. The main reasons for this, according to the IMF, are the weak level of capital expenditure by companies in the energy sector and a noticeable scaling back of inventories.

Growth in China has stabilised recently thanks to the government’s economic stimulus package. However, companies’ high debt levels are a source of concern. The economies of Brazil and Russia have not contracted quite as much this year as had been anticipated.

Sectoral conditions

Sales markets

After a somewhat muted performance in the first six months, the global market for industrial trucks grew strongly in the third quarter. The number of trucks sold globally rose by 13.2 per cent on the back of continued strong demand in Europe and sharp increases in both China and North America. The overall rate of growth in the first nine months of the year was 5.9 per cent.

In western Europe, order numbers were up by around 13 per cent in the first three quarters of 2016, with all of the major markets except the United Kingdom registering significant gains. The increase in the Italian market was particularly strong at over 30 per cent. Order numbers rose significantly, by approximately 19 per cent, in eastern Europe as well, with Russia’s recovery also continuing.

Thanks to a strong increase in the third quarter, North America also reported gains. South America’s downward trend continued, although it was less pronounced than in the previous quarters.

Demand in China saw a surprisingly sharp rise in the third quarter, mainly due to disproportionately strong growth in basic IC trucks. The tightening of emissions standards had already had a positive impact in the first months of the year.

Broken down by product segment, the bulk of the growth was generated by warehouse trucks, followed by electric forklift trucks. Demand for IC trucks picked up in the third quarter, primarily because of the development in China, but was still down slightly compared with the first nine months of 2015. > 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 low level in the first nine months and their average was lower than in the corresponding period of last year. The oil price continued to rise again in the third quarter, but the average for the year also remained well below the prior-year level.

Overall, currency effects had a negative impact on the KION Group’s business situation in the first nine months of 2016. Following the announcement of the results of the UK referendum, the euro further appreciated against the pound sterling. The euro also made gains against the Brazilian real and Chinese renminbi in the period under review.