Outlook for key customer industries

• Stable growth expected in global industrial production for 2018

We expect global industrial production in 2018 to grow at more or less the same rate as in the previous year (2017: +3.3%; 2018: +3.2%). The trends in the regions are mixed: Growth in the E.U. and Japan will probably weaken compared with the high level of 2017. By contrast, we anticipate a slight upturn in the United States. In the emerging markets of Asia, we assume that China will experience a cooldown but India will return to stronger industrial growth. In South America, the recovery in industrial production that emerged over the course of 2017 is expected to continue.

The transportation industry should post stable growth overall, roughly on the same level as in 2017. We continue to anticipate modest growth rates for the automotive industry in western Europe, but stronger and stable growth of around 3% for production in the transportation industry as a whole. Continued robust growth is forecast for the eastern European automotive market, supported by a dynamic recovery of production in Russia. Automotive production in North America should also once again see slight growth in 2018 after the decline in the previous year. One reason is the anticipated replacement of the vehicles that were destroyed in the hurricanes in fall 2017. We expect growth in Asia to slow, mainly as a result of the phasing out of sales tax incentives in China at the end of 2017. By contrast, the automotive industry in South America is expected to continue its recovery.

In the energy and raw materials sector, we anticipate stronger production growth for 2018. The increase in prices for energy raw materials will drive forward the production of unconventional oil and gas deposits in the United States. In the Middle East, on the other hand, we only anticipate a slight rise in growth rates due to the ongoing production cuts imposed by the OPEC countries. We predict slight growth in South America for 2018 following the decline in the previous year. In Europe, too, we expect energy and raw material production to expand at a slightly higher rate.

Global growth in the construction industry should increase slightly in 2018. However, we expect slightly weaker growth overall in western Europe: The construction industry in Germany is stretched to its capacity limits, government subsidy programs in France are coming to an end and the announced Brexit is negatively impacting construction demand in the United Kingdom. We anticipate robust growth in demand in the eastern European construction sector, which is also supported by a gradual recovery in Russia. For the United States, we forecast low growth in the construction industry, but higher than the weak prior-year level; in the infrastructure segment, we once again expect a slight increase following a significant decline in the previous year. In China and the other Asian emerging markets, we predict largely stable growth rates in the construction industry. As in previous years, the highest growth rates will likely be in infrastructure investment. For South America, we predict a weak increase in 2018 for the first time after four years of declining construction activity. Given a background of continuing weak oil and gas prices, the construction industry in the Middle East should see moderate growth.

We expect consumer goods production to pick up slightly in 2018 in line with the positive trajectory of the world economy and rising purchasing power of consumers. Growth in western and eastern Europe should weaken somewhat after an exceptionally strong previous year. We expect moderate growth in production in North and South America in 2018. In Asia, the world’s largest market for consumer goods, we forecast stable growth roughly at the high prior-year level.

The electronics industry benefits from increasing digitalization and automation. Following strong growth in the previous year, particularly in Asia, growth rates should remain high but ease slightly in 2018. The industry will see different trends in the main production countries: We still anticipate double-digit growth rates in the emerging economies of Asia despite a slight slowdown. The downturn is expected to be more pronounced in Japan. Growth in the United States should increase slightly.

We expect slightly lower growth in the health and nutrition sector for 2018 after a comparatively strong performance in 2017. The weaker global growth rate is primarily attributable to Asia, where momentum will be strong but slightly slower. In Europe, too, we anticipate a slight decline in growth, while slightly stronger increases are forecast for North and South America.

Agricultural production should see stable growth in 2018 on a level with the long-term average. That being said, we expect very different regional trends. We anticipate slightly stronger growth at a low level in Europe, while production in North America should expand at a higher rate after the weather-related losses in the previous year. Continued growth is forecast for South America; however, this is expected to be weaker than the rates seen in 2017. The agricultural industry in Asia should expand at roughly the same robust level of the previous year.