Market Insight
SPRING 2017

Annual report
Year 2017

Market Insight
FALL 2017

Market Insight
WINTER 2017-2018

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Economic context in Europe

Quaterly real GDP growth rate and outlook for the Eurozone (%)

Source : OECD - Economic Outlook January 2017 and June 2017

 

  • The pace of economic growth in Europe surpassed expectations at the beginning of this year, propelled by resilient private consumption, a synchronized global upswing, and low interest rates.
  • In Germany, the largest European economy, year-on-year growth in 2017 is expected to be 2.3 %, compared to 1.9 % in the Euro area as a whole. For 2018, the projected rate is 1.9 % in Germany and 1.7 % in the Euro area.
  • Growth in Germany is currently driven by exports and investments, and by rising private consumption. In the manufacturing sector, new orders and output expectations improved.

 

Exports from European Union (UE) countries outside (Extra-EU-28) and inside (Intra-EU-28) the EU (Index 2010=100)

Source : Eurostat

 

 

  • Exports of EU countries to countries outside the EU are stimulated by a synchronized global upswing, related to the economy of BRIC countries (China, Russia, Brazil, India).
  • The appreciation of the Euro against the US-Dollar since spring 2017 may have dampened this growth a little, but could not change its overall direction (According to forecasts of the EU Commission (European Economic Forecast – Autumn 2017, published in November 2017), the Euro’s nominal effective exchange rate is foreseen to appreciate by about 6 % over 2017 and 2018. This could dampen the export growth but is not supposed to change it fundamentally).
  • Intra-EU-trade is continuing its increasing path, and has accelerated since the beginning of the year. Similarly since January 2017 imports from countries outside the EU to the EU have steadily increased and Q2 2017 imports increased by 1% compared to Q2 2016.

 

 

Industrial activity and inland navigation

 

Index of industrial production in the EU-28 and goods transport in the EU

Source : Eurostat

 

Index of industrial production in the EU-28 and goods transport in the EU

Source : Eurostat

 

  • In parallel to exports, industrial production growth has accelerated since the beginning of 2017. The year-on-year growth rate was 2 % in Q1 2017, 3 % in Q2 2017 and already 4 % in Q3 2017.
  • IWT transport performance in the EU reached 38.5 billion tkm in Q2 2017, compared to 38.0 billion tkm in Q2 2016. The year-on-year growth rate was 1.2 %, and therefore around half as high as growth in industrial production.
  • Despite the recovery of IWT traffic in Q2 2017, a gap in growth dynamics compared to the industrial production still remains.

 

 

Economic situation of inland navigation-related sectors

 

Mineral oil products segment

Refinery output in the EU and crude oil prices

Source : Eurostat (Refinery output) and Federal Reserve Bank of St. Louis (Oil price)

 

Refinery output in the EU and crude oil prices

Source : Eurostat (Refinery output) and Federal Reserve Bank of St. Louis (Oil price)

 

  • Oil prices were decreasing in the 1st half year, but this trend was reverted by a strengthening global oil demand and production disruptions due to hurricanes in the USA.
  •  Supply will be affected by two main points: 1. The OPEC and Russia decided to extend their production cuts until March 2018. 2. The US shale oil production keeps increasing.
  • Counterbalancing these two effects, and taking into account a modestly rising oil demand, forecasts for oil prices in 2018 and 2019 point to a level of 55.7 US-$ in 2018 (average) and a similar level in 2019 (European Economic Forecast – Autumn 2017, published in November 2017).
  • Fuel prices in inland shipping continued in an upward movement in Q2 2017, and were on average 30 % higher in Q2 2017 than in Q2 2016. For the 2nd half year and for 2018, a sideways movement is probable, based on oil price forecasts for this period.

 

Development of fuel prices in the ITW sector (€/100 l)

Source : CBRB

 

 

Steel industry segment

  • The German steel production increased by 1.7 % in the 1st half year of 2017, and by 2.7 % in the first nine months of 2017, compared to the same period in 2016.
  • At the Upper Danube, there was an increase in Austria by 8.7 % in the 1st half of 2017 and by 10.1 % in the first nine months of 2017 (Source of all figures on steel production: World Steel Association).
  • In the Middle Danube, the steel production increased strongly both in Hungary and in Serbia, although on a much lower basis than in Austria and Germany. For Hungary there was a plus of 15 % for the 1st half year and of 56 % for the first nine months. The result in Serbia was +47 % in the 1st half year and +34 % in the first nine months.
  • In the Lower Danube, steel production in Bulgaria grew by 30 % both in the 1st half year and also during the first nine months of 2017.
  • Altogether, the evolution of steel production in 2017 presented a good basis for an uptake of transport demand on European inland waterways. This was also confirmed by transport figures for many countries (see chapter 2).

 

 

Construction sector segment

Evolution of building permits for residential homes in the EU (Index 2010=100)

Source : Eurostat

 

  • The transport of sand, gravel and other building materials on inland waterways is promoted by rising and accelerating construction investments in 2017 and 2018. The increase is especially strong in the Netherlands.
  • The Investment climate in the housing sector is currently very positive, both on the demand side (rising household income, low mortgage rates) and on the supply side (rising price level attracting more investment).

 

 

Agricultural products segment

  • The grain harvest in France in 2017 is estimated to surpass the 2016 season by 26 %. This will lead to rising transport volumes in the 2nd half of the year.
  • According to these updated estimations (Source: French Ministry for agriculture) for France, the harvest of soft wheat is 36 % higher in 2017 than the previous year. For hard wheat an increase of 24 % is foreseen, and for barley an increase of 17 %.
  • For Hungary, an important agricultural producing country in the Danube region, estimated harvest results for 2017 are lower than those of the previous year (-16 %) (Source: EU 28 – 2017 Production Forecast – EU Cereals Balance sheet 2016/17 and forecast 2017/18).

 

 

Market Insight
WINTER 2017-2018

A project co-financed byEuropean Commission

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