The forecasts in this section are derived from the KION Group’s multiple-year market, business, and financial planning, which is based on various assumptions. Market planning takes into account macroeconomic and industry-specific performance, which is described below. Business planning and financial planning are based on expected market performance, but also draw on other assumptions, such as those relating to changes in the cost of materials, labor costs, sale prices, and movements in exchange rates.
With regard to the further course of the coronavirus pandemic and the measures taken in response, this outlook is based on the market assumptions of the International Monetary Fund (IMF). In its economic report published in January 2022, the IMF significantly lowered the forecast for global growth in 2022 compared with the outlook that it had issued in October 2021. This is due to the emergence of the new Omicron variant of coronavirus and the containment measures that have been reintroduced as a result in many countries. Moreover, rising energy and commodity prices as well as disruptions to supply chains are leading to inflation risks. Other factors pointing to gloomier growth prospects according to the IMF are the ongoing difficulties in the Chinese real-estate sector and the slower than anticipated recovery of consumer spending.
Expected macroeconomic conditions
The IMF expects global economic output to rise by 4.4 percent in 2022 (2021: 5.9 percent), although the pace of growth is likely to vary from region to region. The higher growth rate for 2021 was driven by anticipated pent-up demand in connection with the coronavirus pandemic. The IMF predicts growth of 3.9 percent for the developed economies in 2022, a slower rise than in the previous year (2021: 5.0 percent). The US economy is set to expand at a rate of 4.0 percent, which would be slightly above the average for the developed economies of 3.9 percent, whereas growth in the eurozone is expected to be 3.9 percent.
According to the IMF, the economies of the emerging markets and developing countries will expand by 4.8 percent, a significantly slower rate of growth than in the previous year (2021: 6.5 percent). Notably, China is expected to grow by just 4.8 percent in 2022, compared with a rate of 8.1 percent in the reporting year. The reasons for this include the problems in the real-estate sector and the economic restrictions resulting from the zero-COVID strategy.
The IMF believes that the volume of global trade will rise by 6.0 percent in 2022, significantly lower than the rise of 9.3 percent in 2021, which was boosted by pent-up demand.
The emergence of new coronavirus variants that may prolong the pandemic and lead to further economic difficulties is one of the risks that the IMF sees for the macroeconomic outlook. In addition, supply chain disruptions, volatile energy prices, and local wage pressures have created a great deal of uncertainty with regard to inflation and its consequences. Potential interest-rate hikes in advanced economies may result in risks to financial stability and to capital flows, currencies, and the financial situation in emerging markets and developing countries. Other global risks may arise because the geopolitical situation is still very tense and the ongoing climate emergency makes major natural disasters more likely.
Expected sectoral conditions
Based on the economic conditions described above, the KION Group believes that the global material handling market will grow at a moderate rate in 2022. This growth is expected to be driven mainly by the supply chain solutions business, whereas the global market for industrial trucks (including services) is likely to stabilize at below the level achieved in 2021. In the medium to long term, the KION Group expects the material handling market to grow at a much faster rate than global GDP. This is primarily because the central growth drivers will remain intact, particularly the fragmentation of value chains and the ongoing consumer pivot toward e-commerce. Growth at regional level, especially in the more cyclical market for new industrial trucks, will again depend heavily on economic conditions in the main sales markets.
The KION Group is predicting a high single-digit percentage decline in the number of new industrial trucks ordered in 2022 following a very strong year for this market in 2021. This is mainly due to an anticipated decrease in the EMEA and Americas regions. By contrast, new orders are expected to increase in the APAC region, where growth will again be driven primarily by China. Beyond 2022, the KION Group expects to see long-term market growth in the new truck business of around 4 percent. The high number of trucks in operation worldwide provides solid foundations for further revenue growth in the service business.
Based on external analysis of the market, the KION Group believes that the sustained growth in e-commerce will see the market for supply chain solutions continue to expand in 2022 in line with the long-term trend of more than 10 percent.