Market Insight
SPRING 2018

Annual report
Year 2018

Market Insight
FALL 2018

Market Insight
WINTER 2018-2019

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Economic context in Europe

 

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

Source : OECD-Economic Outlook January 2017, June 2017 and December 2017

 

  • In Q3 2017, the year-on-year GDP growth rate in the EU, as well as in the Eurozone, stood at its highest level since Q1 2011. The amplitude of feedback loops within the current worldwide synchronised upswing has clearly been underestimated in previous forecasts.
  • GDP growth in the Eurozone is projected to become weaker in 2018 and 2019, partly due to the downside risks related to the uncertain trade patterns after Brexit (affecting, in particular, trade between the Netherlands and the UK), and partly due to a gradual slowdown of growth in China.

 

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

Source : Eurostat

 

  • The rebound in trade that started in the middle of 2016 is being driven by Asia; strong infrastructure investment in China in 2016 and 2017 is a key driver of the upswing, boosting economic activity abroad, and raising commodity prices.
  • With higher commodity prices, the terms of trade of resource-rich countries such as Brazil or Russia are becoming more favourable, which increases global trade further and results in a positive growth spiral for global trade and economic activity. (The positive growth spiral in global trade explains to a large extent the dynamics of real GDP growth)
  • However, a projected gradual slowdown of stimulus measures in China will challenge the overall pace of trade growth after 2018.

 

 

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 with exports, industrial production accelerated in 2017: the year-on-year growth rate was 2 % in Q1 2017, 3 % in Q2 2017, 4 % in Q3 2017 and 5 % in Q4 2017.
  • IWT transport performance in the EU reached 37.7 billion tkm in Q3 2017, compared to 37.0 billion tkm in Q3 2016. There was also some acceleration: the year-on-year growth rate was 1.2 % in Q2 2017, and 1.9 % in Q3 2017.
  • IWT transport performance grew around half as fast again as industrial production in Q3 2017, but the relative gap in growth rates narrowed slightly, compared to Q2 2017.

 

 

Economic situation of inland navigation-related sectors

 

Mineral oil products segment

Refinery output in the EU and crude oil price

Source : Eurostat (refinery output) and Federal Reserve Bank of St. Louis (oil price)

 

Refinery output in the EU and crude oil price

Source : Eurostat (refinery output) and Federal Reserve Bank of St. Louis (oil price)

 

  • Fueled by rising oil demand, and due to the extended production cuts in OPEC countries and Russia, oil prices were raised to a level of more than 60 US-$ in January 2018, OPEC countries and Russia, oil prices were lifted to a level of more than 60 US-$ in January 2018.
  • Further price increases in 2018 and 2019 are projected to be more limited, as the rising non-OPEC oil production in the USA would act as a counter-balance if oil prices would increase further. (European Economic Forecast – Winter (Interim) 2018, published in January 2018)
  • Fuel prices in inland shipping were 4 % higher in Q3 2017 than in Q3 2016, and in Q4 2017, the difference was 10 % compared to Q4 2016.

 

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

Source : CBRB

 

Steel industry segment

Year-on-year growth rates of steel production (Qt/Qt-4)
Q1 2017Q2 2017Q3 2017Q4 2017
Germany2%2%5%6%
France4%4%13%0%
Austria6%12%13%6%
Hungary82%72%30%33%
Serbia77%29%16%3%

Source: Calculation CCNR based on World Steel Association

 

  • Strong increase in the Danube countries, and stabilisation in the Rhine region contributed positively to the transport demand on European inland waterways (see chapter 2).
  • Serbia / Hungary: the high growth rates of steel production are explained by the takeover of the Smederovo steel plant on the Danube by a Chinese steel company. The company aims at further increasing steel production in Serbia in 2018. (Source: http://uk.businessinsider.com / Serbia’s Smederevo steel mill boosts revenue (18.12.2017))

 

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 low interest rates on the housing market, and a search-for-yield mode among investors.
  • Although interest rates will increase in 2018, this segment is promoted also in a structural way, due to modal shift initiatives within ports (see also chapter 2 / Waterside traffic in European ports).

 

Agricultural products segment

  • The grain harvest in France in July 2017 was 60 % above the (very low) level of July 2016. For Q3 and Q4 2017 as a whole, the increase was somewhat lower (Q3: +13 %, Q4: +11.5 %). (Source: http://agreste.agriculture.gouv.fr )
  • An even better result in the second half of 2017 was prevented by a dry season in August and September. According to information from the French ministry of agriculture, the eastern regions of France in particular were confronted with dry weather during that period.
  • In the Danube region, the harvest results in 2017 were lower than in 2016. This became clearly visible when looking at the transport demand of middle Danube countries such as Serbia, where grain transport on the Danube dropped strongly in Q3 2017 (see chapter 2).

Market Insight
SPRING 2018

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Market Insight
FALL 2018

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Market Insight
WINTER 2018-2019

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