Economic environment and course of business

      This report is a translation of the original report in German, which is solely valid.


      The dampening of the economic climate toward the end of the previous business year continued in the first quarter of the current business year (2022/23). Particularly Russia’s war of aggression against Ukraine depressed expectations. Following the dramatic increases in energy prices in Europe during the Northern fall of 2021, the Ukraine war along with the European sanctions against Russia (coal, crude oil) triggered a further massive rise in the cost of energy. They turned out to be the major driver of the sharp increase in inflation across Europe, which is palpably dampening consumer confidence.

      Moreover, the supply chain problems that continued unabated throughout the business year 2021/22 were not solved during the current business year’s first quarter. In fact, supply chain bottlenecks are now also affecting other sectors besides the automotive industry. What’s missing in the supply chain over and above components are means of conveyance, in turn leading to logistics bottlenecks.

      COVID-19 also remained virulent, periodically triggering new waves of infection. While they no longer led to any official lockdowns in Europe, individual sectors—particularly in logistics—had to limit their business activities owing to large numbers of employees calling in sick.

      Yet the demand for products of the voestalpine Group continued unabated despite these unfavorable parameters. High order levels as well as replenishments of inventories by some customers led to very good performance for the Group on the whole during the first quarter of the business year 2022/23.

      Declining orders in specific business units were the first sign of a darkening economic climate. The project business, in particular, saw delays during the first quarter. However, the automotive industry benefited from a slight upward trend during the reporting period. The photovoltaics segment, which voestalpine supplies with substructures, even saw its business boom.

      USA/North America

      North America, too, had to contend with high inflation during the first quarter of 2022/23. In contrast to the situation in Europe, however, inflation is not largely imported, so to speak, but instead arises from the very strong domestic economy and a labor market that has mostly been swept clean. Although the economic indicators already cooled off toward the end of the business year 2021/22, the economy in North America remained solid on the whole. Declines in housing construction were offset at least in part by private consumption.

      In contrast to the European Central Bank (ECB), the U.S. Federal Reserve (Fed) has reacted to rising inflation by reversing its expansionary monetary policy and raising interest rates. Especially the latter is weighing on consumer sentiment.

      In this ambivalent economic environment, voestalpine’s facilities in the United States delivered highly positive performance. Two segments—storage technology as well as oil and natural gas—reported very good demand in the first business quarter. The oil and natural gas market is also being supplied by the voestalpine Group’s European facilities. The conversion of the Section 232 tariffs into a quota system as of January 1, 2022, considerably facilitated steel imports into the U.S.

      Brazil/South America

      The Brazilian economy has already been exposed to both high inflation and high interest rates for quite some time. While the country’s economic momentum started to slow down toward the end of the previous business year against this backdrop, the economic environment stayed largely the same during the first quarter of 2022/23. As a major exporter of raw materials, Brazil’s economy benefited from raw materials prices that remained relatively high.

      voestalpine’s facilities in Brazil delivered very good performance in the reporting period. There was strong demand for voestalpine’s products not just from the oil and natural gas sector, but also from the solar industry.


      In contrast to the rest of the world, China reacted to the newly occurring waves of COVID-19 infections by pursuing a consistent zero-COVID policy. Hard lockdowns substantially curbed economic activity in the country’s important economic regions. As the first quarter of the business year 2022/23 wore on, however, government agencies eased their restrictions and the economy began to rebound. Moreover, the central government announced toward the end of the reporting period that it would enact economic stimulus measures.

      The lockdowns affected particularly voestalpine’s Chinese facilities located in the Shanghai area. But they were able to resume working during the first business quarter and, on the whole, delivered highly pleasing performance.