uncertain outlook for the global economy
The global economy is expected to see a slight acceleration in 2016. However, the outlook is unusually precarious. The economic upturn in the industrial countries is likely to become somewhat stronger, aided by low oil prices and expansionary monetary policies. Higher growth rates are also expected for the emerging markets, assuming the severe recessions being experienced by some of the major threshold economies come to an end. However, the situation will remain problematic for countries dependent on crude oil exports in particular. In addition, there are a number of political and structural risks whose occurrence could ultimately impact the economies of the industrial countries.
Global economy: growth forecast A.80 %
2015 2016
World trade volumes 2.6 3.4
Real gross domestic product
World 3.1 3.4 Industrial countries 1.9 2.1 Emerging markets 4.0 4.3 Central and Eastern Europe 3.4 3.1 CIS countries –2.8 0.0 Emerging markets in Asia 6.6 6.3 Middle East and North Africa 2.5 3.6 Latin America and the Caribbean – 0.3 – 0.3 Sub-Saharan Africa 3.5 4.0
Source: International Monetary Fund (IMF) World Economic Outlook, January 2016 update. Growth rates calculated on the basis of purchasing power parity.
The Chinese economy is likely to remain muted. No major momentum is expected from the export sector. The structural changes associated with transitioning to a greater focus upon growing the domestic economy are proving a long-term challenge for the govern- ment. GDP growth is expected to soften notably (IMF: 6.3 %; OECD: 6.5 %). The Japanese economy is likely to expand at a cautious pace, growing somewhat but at a low level (IMF: 1.0 %, OECD: 1.0 %; IHS: 1.0 %).
In the United States, private consumption will benefit from a significant drop in the unemployment rate and lower energy prices. By contrast, exports will suffer from the weak global economic trend and the strong US dollar. All in all, GDP may increase slightly more in 2016 than in the previous year (IMF: 2.6 %; OECD: 2.5 %; IHS: 2.4 %).
In the euro zone, the economic recovery is expected to accelerate slightly. Private consumption will see solid growth thanks to low energy prices and rising employment. A significant increase in imports is likely to be offset by a similar expansion in exports, which will benefit from the weak euro. GDP is likely to see somewhat stronger growth on the whole (IMF: 1.7 %; ECB: 1.7 %; IHS: 1.7 %).
Early indicators suggest that the German economy will continue to grow. Private consumption and state spending will again rise notably. Momentum is also expected to come from corporate investment and residential construction spending. Whilst exports are likely to benefit from the weak euro, the muted world economy will hinder growth. Growth for 2016 as a whole is expected to resemble that of the prior year (IMF: 1.7 %; Sachverständigenrat 1.6 %; IHS: 1.9 %).
Crude oil listings are more likely to rise than fall from the current low level. However, the substantial reserves stockpiled in 2015 should prevent any sharp upward movement in the price of oil.
The ECB will very probably maintain its key interest rate at the current level, al- though it might lower the rate even further if the euro zone economy weakens. By contrast, the US Federal Reserve is expected to gradually raise its key interest rate over the course of the year, which could moderately increase capital market interest rates.
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Group Management Report — ExPECtED DEVElOPmEntS — Overall Board of Management assessment of the future economic position — Forecast period — Future organisation — Future economic parameters
World trade grows moderately
For 2016 we expect the global trade flows relevant to us – air and ocean freight shipped in containers, excluding liquids and bulky goods – to increase slightly in all regions. All in all, we expect to see growth of 3.8 %.
Parcel market expected to see sustained growth
The market for paper-based mail communication continues to decline in Germany, although more moderately than in other European countries. Physical mail volumes are decreasing, primarily because people are communicating digitally to an increasing extent. With E-POST, we have developed a portfolio of digital products that are gaining traction in the German market. At the beginning of 2016, we raised the price of a do- mestic standard letter to €0.70. Compared with the letter postage prices in other coun- tries, our price is almost at an average level.
The German advertising market is likely to continue to see moderate revenue growth in 2016. Advertising budgets will continue to shift towards online media. The trend towards automated dialogue marketing campaigns will remain unchanged. In the mar- ket for paper-based advertising, we intend to consolidate our position by expanding our portfolio and ensuring the digital connectivity of our products.
The parcel market will continue to grow in Germany, the rest of Europe and the world, as will cross-border services. We shall drive this development with our solutions for parcel shipping and receipt as well as the associated infrastructure for selected new markets. We plan to strengthen our market position by adding new e-commerce seg- ments, such as food logistics, and by continually expanding our infrastructure. This will also have a positive impact on the international mail business – a market that is likely to see slight growth, particularly due to increasing merchandise shipping.
International express business to remain stable
Experience shows that growth in the international express market is highly dependent upon the economy. Due to the fact that the volume trend in our international express business was significantly more positive than that of our competitors, we expect that the express market will remain stable in 2016.
By implementing initiatives to increase profitability and quality, we intend to con- tinue improving our earnings. We are confident that we shall remain on course for
growth and defend our leading market position. Our global DHL brand campaign and logistics
partnerships will also contribute to this.
market trends in freight forwarding business likely to continue
In 2016, we anticipate developments in the air freight market to follow a similar trend to that of the reporting year. In light of the fact that fuel prices remain low, freight carriers are likely to expand capacities with new wide-body passenger planes and add- itional cargo aircraft, especially to smaller destinations. The most important drivers of demand will be growth in the Chinese consumer market and transports of perishable food products.
We anticipate moderate growth in the ocean freight market, in which market players will continue to face surplus capacities and low but stable demand on the most import- ant trade lanes.
Aided by low oil prices, the European road transport market is also likely to see moderate development in 2016 similar to that of the reporting year.
Contract logistics market continues to grow
The trend towards outsourcing warehousing and distribution as well as the demand for value-added logistics services continue. For this reason, projections indicate that the market for contract logistics will continue to experience stable growth of around 6 %. Many companies prefer to outsource their logistics due to high cost pressure and increas- ingly complex supply chains. Demand for supply chain services is expected to see par- ticularly strong growth in rapidly growing countries such as India, where we benefit from a strong market position. Although the global economic environment remains uncertain, we are well positioned in the Supply Chain division to deliver sustained growth.