Outlook for key customer industries

• Same level of growth expected in global industrial production for 2016

Global industrial production will probably grow by 2.0%, no stronger than in 2015. Industry in the advanced economies will keep growing modestly, by around 1%. In the emerging markets of Asia, we anticipate industrial growth at a level somewhat below that of 2015 (+4.7%). After a decline in the previous year, we anticipate slight growth again for the remaining emerging markets in 2016 (+0.7%).

We foresee overall recovery for the transportation sector compared with 2015. After two years of dynamic development in western Europe, we assume that growth will slow down in 2016. It will probably slacken in the United States, as well. By contrast, China’s automotive industry will show moderate recovery as a result of the decrease in purchase taxes for small-motor vehicles. This should mean a slight increase in automobile production in Asia’s other emerging markets for this reason, as well. Slight growth in the automotive industry is also anticipated in Japan after the previous year’s considerable decline. In Brazil, automobile production is likely to decrease once again and Russia’s market could grow slightly at best.

Production in the energy and raw materials sector will see only marginal gains in 2016 in light of lower raw material prices and moderate growth in the global economy. We anticipate only marginal production increases in western and eastern Europe as well as in the Middle East. In Asia, domestic energy and raw material production is likely to see slight growth. We expect production to decline in North and South America.

For the construction industry, we predict stable growth rates on a global level, with regions varying widely. Construction activity will likely continue to stabilize in western Europe. Low interest rates and increased real income will be a boon to housing construction in northwestern Europe. The branch has been shrinking for years in Italy and France and could bottom out. In the United States, the industry saw a significant upswing in 2015 and the number of construction starts increased sharply. We therefore anticipate robust growth in 2016, as well. In China, however, production growth will probably continue to slow; the housing market in particular is suffering from oversupply. We expect the other Asian emerging markets to show stable growth rates in the construction industry. The South American market is likely to slightly shrink.

We assume that the consumer goods industry will grow somewhat faster than in the previous year. In Asia, demand for consumer goods is likely to remain stable: this prediction is supported by the realignment of China’s economy toward a more consumer-oriented growth model and Japan’s upcoming sales tax increase in 2017. We anticipate restrained growth in production in western Europe’s consumer goods industries. In the United States, production growth will remain far behind private demand, as the strong U.S. dollar will favor the import of consumer goods.

The electronics industry is set to grow as fast in 2016 as it did in the previous year. We anticipate stable growth in Asia, the global center of the electronic industry. We foresee slight deceleration in China and South Korea, whereas Taiwan and Japan will probably show rising growth rates. Growth is expected to be slower in North America and stable in western Europe.

We predict solid global growth roughly comparable with prior-year levels for production in the health and nutrition sector. In Europe, we anticipate slightly higher growth rates overall. In North America, the industry is likely to be somewhat outpaced by the growth rate of gross domestic product. Growth rates in this sector will probably decline slightly in Asia, but at a high level. Production in South America will continue to decrease slightly.

For agriculture, we anticipate worldwide growth on par with the average rate of the past few years. Rising demand from China and India suggests solid production growth at home as well as in Brazil and the United States, two major exporting countries. In Europe, production growth will follow the weak regional trends in demand. The severe economic crisis in Ukraine and the ongoing conflict in the eastern part of the country will be reflected in decreasing agricultural production. The low price of oil will continue to curtail global demand for bioethanol. We expect prices for agricultural raw materials to remain under pressure in 2016.