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Market review Q4 2014, Financial Statements release 2014

The underlying drivers to economic development and the pace of recovery differed across the main economies. The continued weakening of commodity prices, especially the drop in the oil price, impacted economies dependent on raw material exports, whereas net importers of commodities are gradually gaining. The strong domestic demand in the US, benefitting from decreasing oil prices, continued to fuel US GDP growth. At the same time, Russia suffered severely from reduced oil and gas exports, the weakening of its currency and the imposed economic sanctions. This also had a ripple through effect into the European economy. 

The continued disparity between the US economic recovery and the weak development, including deflation threat, in the Eurozone has led to the weakening of the Euro against the US dollar. The Brazilian economy continued to struggle due to the lack of structural reforms, prevailing low commodity prices and delayed investment decisions in several industrial sectors.

Demand in Pöyry’s key domestic markets for energy related services remained subdued. In Europe, low economic activity reduced the demand for energy and maintained energy prices at a low. This, combined with regulatory uncertainties, dampened investment activity in the sector. In Asia and in Thailand in particular, political uncertainties earlier this year caused delays in customer decision making, something that was apparent in the overall investment activity for utilities. Continued growth in the demand for energy in the Middle East, Saudi Arabia and the United Arab Emirates in particular, reinforced the need for investments into new power generation capacity, albeit in a tight competitive environment. 

The low demand for products and services in Europe and in Finland in particular, continued to depress demand in industry related services. However, announced investments into greenfield pulp mills, as well as decisions on production line conversions introduced new business prospects in Europe in particular. Despite the continued weakening of the Brazilian economic situation and outlook, the investment pipeline into new pulp production capacity remained appealing. Low global commodity prices, especially for iron ore and copper, but for other minerals as well and more recently, for oil and gas, continued to burden the prospects in these segments in all regions.

The continued high level of sovereign debt, the weakening financial standing of the public sector, as well as newly initiated austerity measures in many of Pöyry’s domestic markets, especially Europe, reduced the overall demand for infrastructure design and project management services. This development was partially offset by public sector decision making aimed at initiating infrastructure investments in order to stimulate and support the otherwise depressed economic growth.

Slower than expected growth across our key markets, along with tighter cost scrutiny among clients, had a direct impact on demand for management consulting services. On the other hand, increased margin pressure in many of our clients’ industries continued to offer opportunities for Pöyry’s strategic advisory and operational excellence services in particular.

Market review Interim report Q3 2014

Global economic recovery progressed at a different pace in each of the main economies. Political tensions caused by the Ukrainian crisis and in the Middle East persisted and had a negative impact on economic prospects and investments. In the U.S. the economy was gaining momentum, supported by recovering domestic demand. As a consequence, the US Central Bank was tightening its monetary policy in an effort to contain inflation, whereas the European Central Bank pursued quantitative easing measures, concerned by early signs of deflation. The Brazilian economy continued to struggle due to the lack of structural reforms and delayed investment decisions driven by the political uncertainties amidst the presidential elections.

Demand in Pöyry’s key domestic markets for energy related services remained subdued. Despite the easing of the ECB’s monetary policy, growth in the Eurozone remained weak and unevenly distributed. The low economic activity reduced the demand for energy and maintained low energy prices. This, combined with the regulatory uncertainties, dampened the investment activity in the sector. In Asia and in Thailand in particular, prolonged political uncertainties caused delays in customer decision making, which was apparent in the overall investment activity for utilities. Continued growth in the demand for energy in the Middle East, in Saudi Arabia and the United Arab Emirates in particular, reinforced the need for investments into new power generation capacity, albeit in a tight competitive environment.  

The low demand for products and services in Europe and in Finland in particular continued to depress demand in the industry related services. However, recent announcements by the European pulp and paper producers on planned investments into greenfield pulp mills, as well as decisions on production line conversions, introduced some new business prospects in the Eurozone. Despite the continued weakening of the Brazilian economic situation and outlook, the investment pipeline into new pulp production capacity remained appealing. The globally low commodity prices, especially for iron ore and other minerals, continued to burden the mining industry prospects in all regions.

The continued high level of sovereign debt, the weakening financial standing of the public sector as well as newly initiated austerity measures in many of Pöyry’s domestic markets and in Europe in particular reduced the overall demand for infrastructure design and project management services. This development was partially offset by the public sector decision making aiming to initiate infrastructural investments in order to stimulate and support the otherwise depressed economic growth.

The slower than expected growth across our key markets, along with tighter cost scrutiny among clients, impacted directly on the demand for management consulting services. On the other hand, increased margin pressure in many of our clients’ industries offered new opportunities for strategic advisory and operational excellence services in particular. 

Market review Interim report Q2 2014

The global economy in the reporting period was characterised by slower than expected growth in both the developed and emerging economies. Political uncertainties in the European and Middle Eastern regions had an impact on the economies in these geographies, while North America was poised to benefit from improving consumer and corporate sentiment. Different monetary policies aimed at actively supporting European economic growth or addressing inflation in countries such as Brazil. 

Demand in Pöyry’s key domestic markets for energy-related services remained subdued. Despite the easing of the European monetary policy, growth in the Eurozone remained weak and unevenly distributed. The low economic activity reduced demand for energy and maintained low energy prices. This, combined with the regulatory uncertainties, dampened the investment activity in the sector. In Asia, and in Thailand in particular, the political situation was impacting the overall investment activity as customer decision making slowed down. The continued demand for energy in Saudi Arabia and the United Arab Emirates led to new investments in the infrastructure market and power generation in particular, albeit in a tightening competitive environment. 

In spite of the economic environment during the period, recent announcements by several European pulp and paper producers introduced new business prospects. Planned investments are in greenfield pulp mills and production line conversions, mainly from paper to board grades. In Brazil, the investment pipeline into new pulp production capacity remained attractive. 

High levels of sovereign debt and the financial standing of the public sector in several of Pöyry’s domestic markets in Europe impacted the overall demand for infrastructure services. 

Moreover, slow economic growth and reduced investment activity were equally affecting the demand for management consulting services, where clients’ spending has declined. This development had an additional impact on demand for services amidst the traditionally slower summer period.  

Market review Interim report Q1 2014

The economic outlook in Pöyry’s key domestic markets and business sectors during the first quarter remained generally uncertain. Northern Europe, the European energy sector and recent political developments have been raising concerns. In spite of these facts, underlying demand developed steadily. However, increasing competitive pressure required attention and clients’ decisions on larger investments in particular have been prolonged.

 

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