The forecasts in this section are derived from the KION Group’s multiple-year market, business and financial planning, which is based on various assumptions. Market planning takes into account macroeconomic and industry-specific performance, which is described below. Business planning and financial planning are based on expected market performance, but also draw on other assumptions, such as those relating to changes in the cost of materials, labour costs, sale prices and movements in exchange rates.
Expected macroeconomic conditions
In its outlook for 2020 published in January 2020, the International Monetary Fund (IMF) predicts a modest increase in the rate of global growth to 3.3 per cent, which will be driven mainly by the anticipated rally in the economies of the emerging markets and developing nations. The IMF expects higher growth rates particularly for India, Russia and Central and South America, whereas growth in China is likely to slow a little. By contrast, the pace of expansion in the developed economies – including the eurozone – will remain at the low level achieved in 2019. According to the IMF’s prediction, the worldwide volume of trade will grow at a much faster rate than last year.
Initial indications that the manufacturing industry and global trade appear to have turned the corner are positive signals for the global economy. They are accompanied by an intensification of expansionary monetary policy by the central banks, the first signs of a rapprochement in the US-China trade dispute. The UK’s withdrawal from the EU on 31 January 2020 and the associated transition phase also supports the assessment of a possible economic recovery.
This outlook from the IMF is lower than its previous expectations, which it primarily attributes to unexpected macroeconomic difficulties in some emerging markets.
The organisation makes explicit reference to risks that may result, for example, from an escalation in the trade dispute between the US and some of its trading partners or from geopolitical factors.
Expected sectoral conditions
The overall market for industrial trucks and warehouse systems is likely to see further strong growth in 2020 if economic conditions stabilise slightly as expected. The ongoing expansion of the supply chain solutions market and a stabilisation of the global market for industrial trucks are primed to be the engines of growth. Overall, the global material handling market is once again expected to grow at a much faster rate than global GDP. The KION Group believes that this is primarily because the fundamental growth drivers will remain intact, particularly the fragmentation of value chains and consumers’ increasing preference for e-commerce. Growth at regional level, particularly in the cyclical market for industrial trucks, will again depend heavily on the economic conditions in the main sales markets.
Following the market correction in 2019, the KION Group is expecting new business with industrial trucks in terms of unit sales to hold steady in 2020, but to be below the long-term growth trend of around 4 per cent. Further geopolitical tensions and global economic uncertainty cannot be ruled out for the year 2020. The KION Group is in an excellent position from which to take advantage of the continued progress that is expected in the electrification of warehouses. The high number of trucks in operation worldwide provides a sustainable customer base for the service business.
In 2020, demand for supply chain solutions in the form of warehouse automation is likely to again be underpinned by the strong inclination to invest seen in the main customer industries in connection with omnichannel and e-commerce strategies. In the medium-term, market growth is expected to be in the high single digits.
