Economic review & forecasts Chris Sleight Editor International Construction.
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Transcript of Economic review & forecasts Chris Sleight Editor International Construction.
![Page 1: Economic review & forecasts Chris Sleight Editor International Construction.](https://reader030.fdocuments.in/reader030/viewer/2022032723/56649d0b5503460f949deb26/html5/thumbnails/1.jpg)
Economic review & forecasts
Chris SleightEditorInternational Construction
![Page 2: Economic review & forecasts Chris Sleight Editor International Construction.](https://reader030.fdocuments.in/reader030/viewer/2022032723/56649d0b5503460f949deb26/html5/thumbnails/2.jpg)
Contents
Global economic trends
Construction industry trends – global and US
Trends & cycles in the crane industry
Trends in the heavy transport sector
Outlook based on economic forecasts
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Warning
Economic forecasts always have uncertainty We live in very uncertain times
If any forecast today turns out to be accurate it is pure luck
But forecasts have a valueShow broad trendsSummarise complex situations
Form your own opinion! What is important for your own situation?
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World economic growth 2012
EU -0.4%US 2.2%
LAm 3.2%
S. AF 5.0%
CIS 4.0%
RoA 6.7%
WORLD 3.3%
MENA 5.3%
JP 2.2%
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World economic growth 2013
EU 0.2%US 2.1%
LAm 3.9%
S. AF 5.7%
CIS 4.1%
RoA 7.2%
WORLD 3.6%
MENA 3.6%
JP 1.2%
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World economic growth 2017
EU 1.7%US 2.6%
LAm 4.0%
S. AF 5.8%
CIS 4.1%
RoA 7.7%
WORLD 4.6%
MENA 4.5%
JP 1.1%
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GDP trends
Strongest growth in emerging markets
BUT growth moderating in China & India
Developed countries remain weak
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GDP trends & construction
Growth in construction is in line with GDP growth
Construction output ~ 10% of GDP
GDP data indicates size & trend of construction market
GDP & construction are key drivers for lifting & transportation industries
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Global construction market
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Global construction markets: growth trends
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Global Construction outlook
Global: ~+4% growth this year
Europe: Return to recession
North America: Good growth from low base
Japan: Continued stagnation
Developing Asia: Strong growth – circa +7%. China & India slowing
Latin America: Strong growth – circa +6%. Inflation concerns
ME/AF: Generally strong – depends on commodity prices
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US construction output – US$ billion
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Crane industry trends
Manufacturers’ revenues & profitability
Stock market performance of crane manufacturers
Fleet sizes
Relation to wider economic trends
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Source – World Crane Report
Unique study of the global industry
10-year study
Manufacturer trends
Owner trends
Insights into fleet composition
Links to wider economic trends
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Manufacturers – 10-year revenue trend (US$ million)
Peak = US$ 31.7 billion
-25% drop in 2009
+6% - +8% growth since
Re-gain peak in 2014-15?
Chinese = 30% of total
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Quarterly sales ($ million) –‘traditional’ crane manufacturers
2007 2008 2009 2010 2011 Q1-3 2012
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Operating margin - selected ‘traditional’ crane manufacturers
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Stock market performance – year to date
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Manufacturers - conflicting indicators
Revenues & profitability recovering- Revenues up on 2011, but looking flat this year- Significant improvement in margin
Weak Chinese market deflating share prices- Chinese truck crane sales down ~ -45% in 1st half- Stock market weakness from May onwards – China, Euro Zone etc.
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Total fleet – Top 50Total fleet = 21,896 mobiles & crawlers
Almost unchanged since 2008
Continued growth in Europe
North America more cyclical
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Top 50 – wheeled mobile vs crawlerRatio of mobiles:crawlers 78:22 in 2012
All cranes 2003 201216,470 21,896(+33%)
Mobile cranes 2003 201213,118 17,022(+30%)
Crawler cranes 2003 20123,352 4,874(+45%)
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Top 50 – total load momentChange 2003 – 2012
Total4.6 14.9 million tonne-metres (+225%)
~ 1.53 4.98 million tonnes lifting capacity
Per crane279 682 tonne-metres
~ 93 227 tonnes lifting capacity
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North American fleet size – mobiles & crawlers
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US fleet size & GDP - % change
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Cranes vs economic cycle
Global fleet did not shrink in recession years- Capacity increased significantly!
US fleet has been more cyclical- Follows GDP growth with 1-2 year lag- Start of modest fleet growth in 2012- GDP does not look strong enough to trigger high fleet growth
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Heavy transport
Trends in specialized heavy transport
Road transportation & fuel prices
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IC&ST Transport 50 – global capacity (t)
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Transport 50 – North American capacity (t)
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Historic US retail diesel prices - $/gal
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Oil price - $/barrel (WTI)
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Heavy transport costs
Direct correlation between oil price & diesel price
Outlook for oil price:– US Energy Information Administration predicts -8% fall in 2013– Trending lower over medium term due to global economy
Equates to US$ 3.70 per gallon (~ US$ 4.00 in 2012)
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Heavy transport trends
+17% increase in heavy transport capacity in 2012
US trailer-focussed market (79% trailers vs 21% modular)(Europe 14:86, World: 47:53)
Diesel prices softening, but staying high
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Outlook for sector
Improvement in early 2012, but outlook has weakened
(Fuel) costs may fall
Reasonable recovery in US construction crane sales
Globla UncertaintyEuro-zone, China, US fiscal cliff