Economic Outlook

Global economy

For 2020, we anticipate the environment to remain challenging and for global economic growth to hover around the previous year’s level. Positive impetus stems from solid domestic demand in the industrialized countries coupled with dissipation of the trade dispute between the United States and China. Growing tensions in the Middle East, however, could have an adverse effect on global economic performance.

In Western Europe, we expect slightly positive growth, mainly on account of declining unemployment rates, rising incomes, and higher government spending. The European Central Bank continues to pursue an expansive monetary policy, which could serve to bolster this trend, although the effects on the real economy will no longer be significant. We project Germany’s export-oriented economy to see slightly lower year-over-year growth of approximately 0.4%. For Eastern Europe, we anticipate only a slight slowdown in performance, which will nonetheless remain robust.

After weaker performance in the previous year, we expect the Middle East and Africa regions to return to robust growth rates. Driven by a recovery in the construction and mining industries as well as oil production in Brazil, Latin America will likely return to positive growth rates.

The overall positive economic trend in North America is anticipated to continue through 2020. Factors contributing most to this development are domestic demand in the United States, which continues to be stable thanks to low unemployment, positive impetus for the residential real estate market and the country’s ongoing expansive fiscal policy.

For China, we project continued robust economic growth in 2020 that will, however, reflect a slowdown from the previous year. Economic stimulus initiated by the government and a pause on the trade conflict with the United States are expected to result in macroeconomic stability that is expected to benefit both the country and the Asia-Pacific region as a whole.

Main customer industries*

In 2020, we expect the global automotive industry to return to growth of around 1%. Positive growth rates in Asia-Pacific, particularly thanks to China’s recovery, and in Europe will contribute to this development. North America should see somewhat higher growth than the Asia-Pacific region and Europe.

For the global construction industry, we expect a slight decline in growth from the previous year to around 2% in 2020. In Europe, North America, and the Asia-Pacific region, we project ongoing positive growth rates that will, however, be lower than in the previous year.

We expect the global electrical, electronics and household appliances sector to grow at the prior-year level of around 4% in 2020. All regions are anticipated to see positive growth rates, with Europe and Asia-Pacific likely to stabilize at the prior-year pace. However, we believe North America will see a strong decline in the pace of growth.

In the global furniture industry, 2020 should bring growth of some 2%, around the previous year’s level. The main driver here continues to be the Asia-Pacific region, which continues to experience stable expansion of around 3%. We expect a positive trend in Europe and Latin America with growth somewhat higher than in the prior year. In North America, we anticipate only minimal growth, slightly over the previous year’s level.