APC 2013 Annual Report Download - page 174

4BUSINESS REVIEW
TRENDS IN SCHNEIDER ELECTRIC’S CORE MARKETS
Trends in Schneider Electric’s 1.
coremarkets
Industries and machine manufacturers
Continuing improvement of global growth and business climate Indeed, the market has already reached a high level after the
(PMI) over the year has at last resulted in a rise of industry market strong cyclical recovery in 2010 and 2011 and generous taxation
during the second half of 2013. However, it remains subdued on a policies for equipment spending. Furthermore, uncertainties linked
global level with varied positions across major regional blocks. to the debt ceiling debate and Government shutdown weighed on
companies’ investment behavior.
Western Europe GDP exited from recession in Q2 and slightly
increased since then. Against this backdrop, industry market In China, industry market growth rebounded, driven by
stabilized one quarter later lifting out of a long and severe improvement of external demand and investment in machines.
recession. Most zones have experienced a sequential improvement Automation offer benefited from Chinese manufactures’ needs to
at year end, including Spain and Italy. increase efficiency so to reduce impact from labor cost increases.
In North America, manufacturing companies have benefited from In Japan, industry market bounced during the second half of the
stronger external demand from Europe and China in the course of year, machine manufacturers producers benefiting from gain in
the year. Companies were also helped by lower energy costs competitiveness allowed by Yen depreciation.
thanks to shale gas. Despite those positive factors, the growth of In other new economies as a whole, industry market slowed down
industry market, mainly driven by investment in equipment and during the second half of the year, hampered by capital outflows
production of machines, was moderate. and tightened credit markets (Russia, India, some East Asian
countries…).
Non residential and residential buildings
Non residential buildings
In Western Europe, non residential construction continued to fall, In China, the market experienced a strong growth in 2013, driven
notably in Southern Countries (Spain, Italy, and France), penalized by a rebound in company’s capex, government investments,
by private-sector deleveraging and public-sector austerity. In continuously raising rental prices and urbanization. Growth stayed
United Kingdom, improving business confidence has encouraged resilient during the second half of the year, despite reportedly
firms to lift their investment, and non residential construction has tighter mortgage conditions.
stabilized in the course of the year. In Australia, the market has recovered at a moderate pace.
In the US, non residential construction as a whole grew at a low In India, market grew at a low pace, hampered by high interest
pace. Positive growth in commercial buildings was offset by a rates and structural constraints.
decrease in public buildings. Most publicly funded segments In Saudi Arabia, despite a vast pipeline of projects the market was
recorded decrease as a result of fiscal pressure and government hit by labor shortages resulting from new labor laws.
spending cuts.
Residential
Growth in residential market outperformed other construction and France. The market was close to flat in Germany and Nordics
categories in 2013, driven by the US, Japan, and a lower rate of and slightly rose in United Kingdom.
decrease in Western Europe. In Australia, the market returned to growth after a deep recession
In North America, residential construction has continued to recover in 2012.
at a strong pace in the US, for the third consecutive year, In China, residential construction has gradually risen during the
sustained by employment growth, demography, price increase and year despite reportedly tighter mortgage conditions and the
lower inventory. On the contrary, the market turned down in introduction of new tightening measures in big cities.
Canada and Mexico. In other new economies as a whole, residential market continued
In Western Europe, residential market bottomed out during the to grow in 2013, notably in South America and Africa. India, Russia
third quarter and slightly decreased on a yearly basis compared to and some East Asian countries were impacted by the financial
2012. The decrease was due to Southern Countries: Spain, Italy turmoil in emerging markets, higher interest rates and fiscal
tightening.
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