Economic environment
EUROPE
In the first half of the 2025/26 business year, the subdued economic development in Europe continued. While industrial production largely stagnated and net exports declined, private consumption remained solid thanks to a stable labor market. During this period, economic sentiment fluctuated between cautious optimism – triggered by the announcement of extensive infrastructure programs in Germany and increased investment in Europe's security architecture – and ongoing uncertainty, particularly due to protectionist measures by the US administration.
After intensive negotiations, an agreement was reached on flat tariffs of 15 % on all US imports from the EU. Regardless of this, tariffs of 50 % apply to steel imports into the United States.
For the voestalpine Group, this environment meant continued subdued demand in the construction, mechanical engineering, and consumer goods sectors. Demand in the automotive sector developed differently depending on the business area: While demand for automotive components continued to decline in the first half of the year, demand for high-quality steel sheets in this market segment remained stable at a good level. The markets for railway infrastructure, aviation, and storage technology continued to develop positively.
The impact of US tariffs on steel imports had a negative effect on individual business areas of voestalpine. The tubulars product segment was particularly affected.
USA/NORTH AMERICA
Despite numerous announcements, withdrawals, negotiations, and new US tariffs against almost all trading partners, North America’s economic development remained largely unaffected in the first half of 2025/26 and showed an overall robust, positive trend. Growth in gross domestic product (GDP) was driven primarily by investments in the technology sector, particularly in the field of artificial intelligence. Private consumption also remained stable.
In contrast, the situation on the labor market deteriorated slightly during the first half of 2025/26. However, revised labor market data and the effects of the government shutdown in September made it difficult to assess the actual situation clearly.
Despite the positive macroeconomic data, the voestalpine Group’s North American locations faced uncertain customers and correspondingly cautious orders. Overall, the North American market showed good demand for voestalpine in the areas of storage technology, aerospace, and railway systems in the first half of 2025/26. By contrast, business development in Tooling and Automotive Components was volatile. Due to lower oil and gas prices, demand for oil and gas exploration products declined during the reporting period.
BRAZIL/SOUTH AMERICA
Brazil, voestalpine’s most important South American market, showed overall positive but significantly slower growth in the first half of the 2025/26 business year. In addition to the agricultural sector, which plays a central role in Brazil’s gross domestic product (GDP), the service sector and, to a lesser extent, private consumption contributed to this development.
In the industrial sector, by contrast, the economic environment deteriorated noticeably. High interest rates of 14.75 % had a significant negative impact on domestic demand. In addition, strong import pressure, particularly from China, led to intense competition on the Brazilian market. Exports to the United States were further hampered by high tariffs imposed by the US administration.
Against this backdrop, voestalpine’s Brazilian sites developed differently. While Railway Systems achieved good performance, Tubes & Sections faced declining demand in some markets. Management at the Brazilian special steel plant Villares Metals responded to the tougher market conditions with extensive cost-cutting measures.
CHINA/ASIA
In China, economic development in the first half of the 2025/26 business year was stable overall but increasingly characterized by structural challenges and geopolitical tensions. The escalation of tariff policy between the US and China led to reciprocal measures, which could only be temporarily eased through an interim agreement on a moderate tariff regime. Despite these uncertainties, GDP growth was achieved compared with the previous year, supported primarily by strong exports.
The domestic economy, on the other hand, developed more weakly. Private consumption remained subdued, investment outside strategic industries declined, and the construction sector suffered from ongoing stress in the real estate market. The government responded with targeted but overall modest economic measures. There was also no broad-based monetary easing.
For the voestalpine Group, the market environment in China was mixed in the first half of 2025/26: While the Tooling segment benefited from stable demand for high-quality tool steel, voestalpine’s Chinese Automotive Components plants experienced declining call-offs and price pressure. By contrast, the market for railway infrastructure continued to develop satisfactorily in the current reporting period.