Since the summer of 2011, the global economy has been trending downward, and in recent months, the situation has progressively deteriorated. This applies to both the situation in most industrial segments and in the most important economic regions worldwide.
With the exception of the automobile manufacturers in the USA, the automobile industry has been facing massive and broad-based cutbacks in demand since the summer of this year. The same applies to investments both in the conventional energy segment (oil, gas) and in the renewable energy sector (wind, solar) where projects in many parts of the world are being increasingly delayed or even postponed for the long term.
The cautious recovery in the white goods and consumer goods industries that seemed to be gaining ground in the spring of 2012 did not maintain its hold over the summer and the order volumes in the mechanical engineering industry have also declined substantially compared to the previous year’s strong figures. The European construction sector continues to experience a weak market environment.
During the first half of 2012/13, the economic environment was positive in only a few sectors, such as the aerospace industry, the agricultural machinery sector, and parts of the premium railway infrastructure sector.
Viewed regionally, the economy in Europe continues to be affected by the sovereign debt situation and the resulting limitations that this places on the investment capabilities of government budgets. Additionally, the weakening of purchasing power is increasingly affecting general consumer behavior negatively in many European countries. While it was the countries in Southern Europe that were dealing with a recession thus far, economic conditions have worsened in the previously robust economic regions of Western and Northern Europe as a result of the close economic ties within Europe. It is especially serious that Germany, a particularly important market for the voestalpine Group, has lowered its growth expectations for the next several quarters.
The economic data from the USA is rather ambivalent, as there is a significant risk that after the election, spending cuts may become necessary in order to avoid raising the debt ceiling, which would lead to a deterioration of the macroeconomic environment. Viewed globally, however, in the first half of 2012/13, the North American economic region still was one of the more dynamic industrial regions worldwide.
In contrast to recent years, industrial growth in China has cooled significantly in the course of 2012. In the third calendar quarter of 2012, China had a growth rate of 7.4%, the lowest figure in three years. The economies of Brazil and India have also lost momentum, while the Russian economy has proved to be relatively robust.
In the raw materials sector (iron ore, coal), there has been a substantial price decline during the past twelve months. In the past several weeks, the prices have stabilized, albeit at a level that is about one third below that of the previous year.