Outlook for Key Customer Industries

• Slower growth expected in global industrial production

Overall, we expect global industrial growth to be weaker in 2020, at 1.2% (2019: +1.5%). In the advanced economies, we expect the slight decline in production to continue overall. In the emerging markets, we are forecasting significantly lower growth compared with the previous year.

We anticipate a downturn in the transportation industry¹ as a whole. We expect global automotive production to again decline, driven in particular by the coronavirus and the resulting production stoppages, as well as lower demand in China.

Consequently, we are forecasting a decline in production in the largest automotive market, China, as well as in Japan and India. Automotive production will likely continue to decline markedly in the E.U. as well: We anticipate a decrease in western Europe and a slight decline in the eastern E.U. countries and Russia. We are also forecasting a slight decrease in automotive production in North America and a recovery in South America after the recession in the previous year.

In the energy and raw materials sector, we expect a low growth rate given the weak overall momentum in the economy and industry. Production growth should be similar to the previous year in both the advanced economies and the emerging markets.

We expect growth in the construction industry to be at the prior-year level. Overall, construction activity should continue to outstrip growth in the manufacturing industry, supported by low interest rates, increasing urbanization and the demand for investment in energy and transportation infrastructure. We anticipate slightly slower construction growth in Europe. In the United States, we expect the downturn in the housing market to bottom out, with construction activity slightly below the previous year. For Asia, we expect construction growth to be lower than in the previous year but still considerably above the global average.

According to our forecasts, growth in consumer goods production will be more or less on a level with the previous year. We expect slightly higher growth in care products, roughly in line with global GDP growth.

Growth in the electronics industry will presumably be below the prior-year figure. The rapid technological progress in this sector, the resulting short product cycles and the advance of digitalization should lead to additional consumer spending and investment. However, growth perspectives for the electronics industry remain subdued overall due to the central role played by China in global value chains.

We anticipate slightly slower growth in the health and nutrition sector. Growth in the food industry should weaken slightly in line with the more subdued global economic environment. By contrast, we expect stronger growth in the pharmaceutical industry compared with the previous year as a result of the coronavirus outbreak.

Under normal weather conditions, we expect slightly slower global growth in agricultural production in 2020. For Europe, we anticipate a sideways movement, as in the previous year. In the United States, agricultural production should increase slightly again following the weather-related production losses and the decline in soybean exports to China in the previous year. We also expect the trade agreement with China to provide tailwinds. This should however dampen agricultural production in South America. In any case, we expect lower growth here after the drought recovery effects in the previous year. The highest growth will presumably again be achieved in the emerging markets of Asia.