Annual Report 2015

Future parameters

The expansion of the global economy slowed down in 2015. A gradual but initially rather subdued recovery is expected for the next two years. The current political and economic conflict situation is difficult to predict and anything but clear-cut.

The International Monetary Fund (IMF) made a slight downward adjustment to its forecast for global economic growth for 2016 in January. As well as an escalation in geopolitical crises, the IMF warns in particular of further falls in the price of oil and other commodities, and of sharp devaluations for emerging and developing countries. On December 16, 2015 the US Federal Reserve heralded in a new era of monetary policy in raising the base rate by 25 base points. However the global economy still has a long way to go before interest rates have returned to normal levels. Following global growth of 3.1 percent in 2015, the International Monetary Fund’s forecasts anticipate slightly higher growth in the global economy of 3.4 percent for 2016. A moderate upturn in the international economic environment in the years 2016/2017 will also improve the context and outlook for the target markets of the technotrans Group.

China’s structural transformation from an export and investment-driven economy into one focusing more on the service sector and private consumption is being expressly encouraged by the Chinese government. The turbulence on China’s stock markets and the uncertainty surrounding its monetary policy have recently undermined confidence in China’s state authorities. A permanent slowdown in China’s growth is having a major impact on other countries, including Germany. The mechanical engineering sector and automotive industry are among those particularly affected.

Growth Forecast of Gross Domestic Product in percent

  2016 2017
World 3.4 3.6
USA 2.6 2.6
Eurozone 1.7 1.7
Germany 1.7 1.7
China 6.3 6.0
Emerging Countries 4.3 4.7

The experts from leading European economic research institutes (ifw/EUROFRAME) likewise expect to see Europe’s economy achieve only moderate growth of 1.7 percent in 2016. The mood in the eurozone at the end of 2015 reached its highest point since spring 2011. The region therefore remains resilient to the adverse global climate. The current favourable economic outlook for Germany (+1.7 percent) is still in contrast to the rather weak state of domestic industrial output. Strong consumer spending and accelerating investment activity are the driving forces behind the upswing. According to the ifw winter forecast, German exports continue to expand. The same is true of investment, which is expected to regain momentum thanks to a conducive environment (low interest rates, high income growth, healthy budgetary situation, improving sales and profit expectations at home and abroad).

The German Engineering Federation (VDMA) expects price-adjusted output of machinery and plant in Germany to remain flat in 2016. The many crises worldwide are paralysing business. Although the USA as the key customer and a number of European countries continue to develop healthily, emerging economies such as China and Russia are putting the brakes on the expectations of the German mechanical engineering sector.

The slowdown in the global economic environment is causing considerable uncertainty among most of the branches covered by the VDMA. Because of technical or statutory requirements, the individual areas that make up the mechanical engineering sector have their own cycles, which can therefore differ to some extent from the average for the sector overall. For example, the machine tool engineering sector is highly dependent on the automotive industry, while the printing industry depends on worldwide demand for the offset printing market as well as on digital and packaging printing. There remains growth potential in the relatively new market segment of digital and flexographic printing. Due to ongoing consolidation among printing houses in some industrial countries, the market volume in sheet-fed and web offset printing press business is, however, not expected to expand over the next few years.