This report is a translation of the original report in German, which is solely valid.
Europe
Economic developments in Europe lost momentum throughout the first quarter of the business year 2023/24. Although inflation eased somewhat recently due to lower energy prices, it remains well above the target range of the European Central Bank (ECB), which continued to raise interest rates in the reporting period.
The worsening financing conditions mainly affect the construction and manufacturing industries, where the general trend is characterized by weakening demand, declining orders, and inventory reductions, although problems in the supply chains are increasingly being resolved.
The service sector, on the other hand, remained on a growth path during the reporting period, largely driven by tourism. The savings that Europe’s populations built up during the COVID-19 pandemic have not yet been exhausted.
This divergence between the economic sectors leads to different developments in the individual states of the European Union. While countries with above-average industrial sectors show a relatively weak development in their gross domestic product (GDP), countries with a strong tourism share in GDP show relatively good economic figures.
In this environment, voestalpine was confronted with declining demand from the construction, mechanical engineering, and consumer goods sectors. The automotive industry showed stable to slightly improved demand due to supply chain problems that are being resolved and strong orders on hand. The energy industry still presented itself at a very good level during the reporting period, despite lower energy prices. The same applies to the railway and aerospace industries, which are also expected to perform well in the near future.
USA/North America
The Federal Reserve (Fed) started to fight inflation by tightening financing conditions much earlier than the ECB. The positive effects became visible in the first quarter of 2023/24 with a significant slowdown of inflation. The economic downturn feared in connection with this did not occur in the reporting period. The US economy remained on a growth course overall, driven in particular by private consumption and favorable dynamics in exports. The labor market, which at times tended to overheat, also developed well in the first business quarter, although the growth rate of newly created jobs flattened out somewhat. In view of this overall positive development, economists currently expect only a mild recession for the U.S. at a later point in time than originally forecast.
Against this backdrop, demand for the voestalpine Group's products developed satisfying overall. The railway and energy sectors, in particular, proved to be the cornerstones of the positive business development.
Brazil/South America
The Brazilian voestalpine sites performed very well in the first quarter of the business year 2023/24. Above all, the continuing boom in Brazil’s photovoltaics sector and good international demand from the conventional energy segment created the basis for this.
The Brazilian economy essentially moved sideways over the reporting period, supported by robust private consumption and high food production. Industrial production, however, remained moderate.
The Brazilian voestalpine sites performed very satisfying in the first quarter of 2023/24. Above all, the continuing boom in Brazil’s photovoltaic sector and good international demand from the conventional energy segment created the basis for this.
China/Asia
The momentum of the “reopening” of the economy after the strict COVID-19 lockdowns lost momentum in the first quarter of 2023/24. Investment and industrial production were subdued, reflected in weaker exports.
The service sector, which was still characterized by a demand boom in the last quarter of 2022/23, has also slowed down somewhat.
The Chinese central bank reacted with interest rate cuts. The central government also tried to provide impetus with investments in infrastructure. Although the regulations in the real estate sector were relaxed regionally, the problems here have intensified rather than eased.
Regardless of the overall weaker than expected development, the Chinese economy remains in growth mode.
The Chinese locations of the voestalpine Group showed a largely stable performance under these conditions.