Macroeconomic and sector-specific conditions

Macroeconomic conditions

The ongoing war in Ukraine and the fallout from the coronavirus pandemic weighed heavily on the global economy in the period under review. The further surge in commodity and energy prices as a result of the war, continuing rises in inflation rates, disruptions to global supply chains, and coronavirus-related lockdowns in Asia took a heavy toll on global economic growth.

Inflation reached very high levels around the world during the reporting period. In May, for example, the annual inflation rate was 8.1 percent in the eurozone and even higher in the United States at 8.6 percent. The central banks responded to this erosion of monetary value by putting up interest rates for the first time in this cycle – including substantial hikes in the United States – and this may have a further braking effect on growth.

The World Bank significantly adjusted its 2022 growth forecast for the global economy and warned of several years of elevated inflation and slow economic growth. For this year, the World Bank now predicts global economic growth of just 2.9 percent, compared with 5.7 percent in 2021. As recently as January, it had forecast growth of 4.1 percent. The global inflation rate for 2022 is projected to reach approximately 7.0 percent.

Sectoral conditions

Sales markets

Based on the KION Group’s assessment, the global material handling market grew at a moderate rate in the first half of 2022. However, the level of demand for industrial trucks varied across the KION Group’s sales markets. According to the KION Group, momentum declined in all sales regions in the second quarter due to the macroeconomic uncertainties and the considerable supply restrictions. Order numbers for the first half of 2022 are likely to be up slightly compared with the same period of 2021 in the EMEA region. For the Americas region, the KION Group anticipates that the growth rate will have been stronger. In the APAC region, order numbers were probably down compared with the prior-year period, partly due to the measures taken in Asia to contain the coronavirus pandemic.

Because the relevant trade association has changed the publishing dates for market data on order intake for industrial trucks, no robust data on order numbers in the overall market is available for the reporting period.

Supply chain delays also weighed heavily on the project business for supply chain solutions. The KION Group estimates that the global market for supply chain solutions continued to expand in the first six months of the year. Once again, this market growth was driven by the EMEA and Americas regions. It is not yet possible to fully gauge how the war in Ukraine and declining consumer confidence are affecting economic growth in the KION Group’s customer sectors. According to the KION Group, demand contracted in the e-commerce customer segment but continued to rise sharply in the food and beverage, grocery retail/wholesale, and apparel industries. Despite the announcement by a major e-commerce provider that it will slow down its construction and expansion of fulfillment hubs, the research institute Interact Analysis continues to anticipate a positive trend for the warehouse automation market.

Based on the KION Group’s assessment, the medium- to long-term growth trend in the global market for supply chain solutions and industrial trucks and services remains intact and this is backed up by market studies.

Procurement markets

The internationally applicable sanctions on Russia and Belarus led to further price rises in the commodity markets. The increase in energy commodity prices was particularly pronounced. For example, the oil price leaped to over US$ 100 at the end of February and remained at this level until the middle of the year. By contrast, prices for metals such as palladium and nickel dropped back down after surging at the start of the war in Ukraine. The price of copper also dropped in the second quarter, but remained at a high level.

Financial markets

The KION Group generated 56.1 percent (H1 2021: 50.2 percent) of its revenue outside the eurozone in the reporting period. Important foreign currencies in addition to the US dollar were the Chinese renminbi and pound sterling. The appreciation of the US dollar and Chinese renminbi against the euro resulted in notable positive currency effects. These also had a noticeable impact on the KION Group’s operating performance.