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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.

Market Outlook 2014, Full year result report 2013

The economic and market outlook for 2014 is cautiously optimistic. At the end of 2013 there was improving global growth both in the manufacturing and service sectors. The leading indicators in December showed an expansion in new order volumes backed by improving employment data. This indicates that the rise in economic activity extends into 2014. Global GDP-growth is also projected to increase slightly.

The sector specific outlook remains mixed. In the graphic paper industry, the decline in structural consumption is set to continue. However, in other forest product industry sectors, the outlook is improving.
For energy, and other industrial sectors relevant to Pöyry’s businesses, the long-term economic fundamentals remain solid and investment activity is expected to gradually improve. In Europe the growth remains fragile, delaying economic recovery and investment decisions.

Market review Interim report Q3 2013

Continued economic uncertainty is impacting Pöyry’s energy, industry and infrastructure sectors. Underlying demand  nevertheless remains steady, albeit client decisions are taking longer, leading to delays in procurement of engineering and consulting services. Demand for management consulting services has remained weak with variances across local markets.

Market review Interim report Q2 2013

Continued economic uncertainty is impacting Pöyry’s energy, industry and infrastructure sectors. Underlying demand nevertheless remains steady, albeit client decisions are taking longer, leading to delays in procurement of engineering and consulting services. Demand for management consulting services has remained weak with variances across local markets.

Market review Interim report Q1 2013

Continued economic uncertainty is impacting Pöyry’s energy, industry and infrastructure sectors. Underlying demand nevertheless remains steady, albeit client decisions seem to be taking longer, leading to delays in
procurement of engineering and consulting services. Demand for management consulting services has generally been weak with differences across local markets.

Market Outlook 2013, Full year result report 2012

In the beginning of 2013 the outlook for the US, China and many emerging economies, including Brazil, is improving. The positive development is supported by low interest rates and fiscal and monetary stimulus.
The leading indicators for Europe are stabilizing but the outlook for the first half of 2013 remains challenging. Global economic growth in 2013 is driven by private consumption and services. The investment
outlook is, however, weaker than the overall economic growth, especially in Europe.

In those energy and the industrial sectors that are relevant to Pöyry’s businesses, the long-term economic fundamentals remain solid, however, demand is increasingly geared to emerging markets whereas
investment activity in Europe is slowing down. Economic uncertainty may continue to delay investment decisions. Regulatory uncertainty may additionally impact upon investment decisions in the energy sector.
The number of potential new nuclear investment projects in certain European countries has decreased but on the other hand, there is an increasing need for investments in other power generation technology. Investment activity in energy transmission and distribution is expected to increase.

The general economic development around Pöyry’s key European markets is expected to evolve moderately. The outlook for Latin America and Asia is somewhat more positive. Industrial production in Northern
Europe is expected to improve modestly. Industrial activity in Continental Europe is expected to remain stable, while industrial activity is expected to resume in Brazil and in Thailand.

However, the current macroeconomic environment may unfavourably impact demand for management consulting services especially in Europe and North America as clients may be postponing assignments for
consulting services.

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