Global growth rate at prior-year level
Worldwide economic growth remained at a moderate level last year. The International Monetary Fund (IMF) 1) is expecting global economic growth of 3.1 per cent for 2016 as a whole, compared with 3.2 per cent in 2015.
The economy of the eurozone grew by 1.7 per cent in 2016, which was slightly weaker than the increase of 2.0 per cent in 2015. Germany's economy stepped up the pace of growth slightly, expanding by 1.7 per cent year on year (2015: growth of 1.5 per cent). The Spanish economy again performed very encouragingly with a growth rate of 3.2 per cent, which was the same as in 2015. France was also on a par with the previous year with growth of 1.3 per cent. Italy's growth increased slightly from 0.7 per cent in 2015 to 0.9 per cent in 2016.
The US economy expanded by 1.6 per cent (2015: 2.6 per cent). This slowdown in the pace of growth was due to declining levels of capital investment. The economy in China held steady over the course of the year thanks to more expansionary economic policy. Gross domestic product (GDP) rose by 6.7 per cent over 2016 as a whole, compared with 6.9 per cent in 2015. The Russian economy remains in recession; South America's performance was weaker than originally anticipated.
Overall, the economic environment was characterised by a variety of risks and uncertainties in 2016, such as the vote for Brexit in the United Kingdom, and these will continue to have an impact this year. China is in a state of transition with a lower growth rate than in previous years and a shift away from the strong export model. The economic effects of the outcome of the US election cannot yet be gauged.
Mixed picture in DEUTZ's customer industries
The situation varied significantly across DEUTZ's main customer markets in 2016. According to DEUTZ’s own estimates, demand for construction equipment rose by around 5 per cent in both Europe and China. However, unit sales of construction equipment fell by approximately 5 per cent in North America. The European agricultural machinery sector contracted again, with demand declining by 5 per cent in 2016. 2) Unit sales of light and medium-duty trucks in China improved by around 7 per cent according to DEUTZ's own estimates.
1) IMF World Economic Outlook Update, January 2017.
2) Konjunkturbulletin of the German Engineering Federation (VDMA), February 2017.