Macroeconomic and sector-specific conditions
According to the forecast published by the World Bank in June 2023, global economic conditions are set to remain challenging beyond the first half of 2023. The overlapping shocks of the coronavirus pandemic, Russia’s invasion of Ukraine, and the dramatic tightening of monetary policy have caused setbacks that seem to be having a persistent adverse impact on global economic output. Although growth in a number of major economies, including China and the US, has been healthier than had been expected at the start of 2023, resilience is expected to weaken and the pace of global economic growth is predicted to continue to wane as the year continues. The World Bank believes that inflationary pressures will persist over the further course of the year and the impact of measures by the central banks to restore price stability will reach their peak in many major economies in 2023. Recent tensions in the banking sector could cause a further deterioration in credit conditions, which could dampen global economic growth in the second half of this year.
For 2023 as a whole, the World Bank predicts growth of 2.1 percent, compared with 3.1 percent in the prior year. The developed economies will likely see an uptick in growth of just 0.7 percent, with the eurozone economy projected to grow by 0.4 percent in 2023. By contrast, emerging and developing economies are expected to grow slightly faster than in 2022, expanding by 4.0 percent. This outlook is strongly influenced by the fact that the Chinese economy is predicted to grow by 5.6 percent.
According to the KION Group, the international industrial truck market in the EMEA and Americas regions saw a substantial fall in order numbers in the reporting period. The robust figures for the first half of 2022 had been bolstered by customers placing orders earlier than originally intended in response to longer delivery times. By contrast, the KION Group believes that order numbers in the APAC region went up noticeably in the reporting period. Figures from trade associations concerning the growth trend in the overall market for industrial trucks in the first half of 2023 were not available at the time this report was published.
The global market for supply chain solutions continued to be affected by economic uncertainties in the first half of 2023. Moreover, decisions by companies to invest in new warehouse space were adversely affected by the higher cost of capital, which caused delays to investments in warehouse automation. The research institute Interact Analysis (2023) currently forecasts a fall in new warehouse space for 2023 as a whole, compared with the very strong figure for the previous year. Factors contributing to this decline include a temporary lull or slight drop in investment from the retail sector as demand for e-commerce in this customer segment normalizes after a period of robust growth. On the other hand, government incentives encouraging manufacturers – especially in the Americas and EMEA regions – to relocate activities to domestic or nearshore locations had a positive effect on demand for automation solutions. In addition, the findings of Interact Analysis (2023) identified a persistent trend toward increased demand for mobile automation solutions as these require less capital investment and can be deployed more flexibly than stationary solutions. The KION Group thus believes that positive medium- and long-term trends in the supply chain solutions market remain intact.
In the commodity markets, prices came back down somewhat from the lofty heights to which they had climbed in the previous year. The price of crude oil had already started to normalize in the second half of 2022 and stabilized during the reporting period within a range of US$ 75 to US$ 85 per barrel. Steel traded at significantly lower prices in the first half of 2023 than in the corresponding prior-year period. Copper and nickel also weakened noticeably.
Financial market environment
The KION Group generated 50.4 percent (H1 2022: 56.1 percent) of its revenue outside the eurozone in the reporting period. As in previous periods, the US dollar, pound sterling, and the Chinese renminbi were the most important foreign currencies. The euro appreciated against the US dollar over the first six months of 2023. Nonetheless, the exchange rate remained just below the average rate for 2022. Likewise, the euro strengthened against the Chinese renminbi. Currency translation effects had only a marginal negative impact on the KION Group’s operating performance in the reporting period, whereas the prior-year figures had been strongly influenced by positive currency effects.