Macroeconomic environment

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Gross Domestic Product (GDP) in real terms1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Growth

 

 

% Weighting3

 

2010

 

2011

 

2012

 

2013

 

2014

1

Source: The Economist Intelligence Unit Ltd., in respect of countries in which Linde operates. The prior-year figures have been adjusted on the basis of the latest available data (as at 26 January 2015).

2

In respect of 120 countries.

3

Weighting is based on GDP 2014.

EMEA

 

33.2

 

2.6

 

2.4

 

0.4

 

0.7

 

1.5

Eurozone

 

17.4

 

2.0

 

1.7

 

−0.7

 

−0.4

 

0.8

Germany

 

5.0

 

3.9

 

3.7

 

0.6

 

0.2

 

1.5

Asia/Pacific

 

24.9

 

8.5

 

6.5

 

5.5

 

5.5

 

5.6

China

 

13.5

 

10.4

 

9.3

 

7.7

 

7.7

 

7.3

Americas

 

32.4

 

3.2

 

2.2

 

2.4

 

2.3

 

2.1

USA

 

22.7

 

2.5

 

1.6

 

2.3

 

2.2

 

2.3

World

 

100.0

 

4.1

 

2.8

 

2.2

 

2.3

 

2.52

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Industrial Production (IP)1

 

 

 

 

 

 

 

 

 

 

 

 

 

% Growth

 

 

2010

 

2011

 

2012

 

2013

 

2014

1

Source: The Economist Intelligence Unit Ltd., in respect of countries in which Linde operates. The prior-year figures have been adjusted on the basis of the latest available data (as at 26 January 2015).

2

In respect of 120 countries.

EMEA

 

6.2

 

3.1

 

−1.4

 

−0.3

 

1.4

Eurozone

 

6.5

 

2.8

 

−2.8

 

−0.8

 

0.7

Germany

 

10.1

 

7.3

 

−0.4

 

0.1

 

1.5

Asia/Pacific

 

12.5

 

9.5

 

7.4

 

5.5

 

5.5

China

 

13.5

 

12.8

 

10.3

 

9.7

 

8.4

Americas

 

5.7

 

3.3

 

3.1

 

2.5

 

3.0

USA

 

5.7

 

3.3

 

3.8

 

2.9

 

3.9

World

 

7.9

 

3.4

 

1.5

 

1.5

 

2.62

Global economic trends

Linde operates in more than 100 countries worldwide and offers its customers a diverse portfolio of products and services. Macroeconomic trends and economic conditions in the various regions therefore both have a significant influence on the Group’s business situation. So that the business performance of Linde can be put into perspective, a summary is given below of economic trends in 2014.

Based on data from the international forecasting institute The Economist Intelligence Unit (EIU), global economic growth was scarcely higher in 2014 than in 2013. Global gross domestic product (GDP) rose by 2.5 percent (2013: 2.3 percent), while global industrial production (IP), an important indicator for Linde’s business, increased by 2.6 percent (2013: 1.5 percent). The global economy therefore grew more slowly than had been expected at the beginning of 2014, when economists were still forecasting GDP growth of 2.9 percent and a rise in IP of 3.3 percent.

In the course of the year, the world economy was adversely affected in particular by an increase in geopolitical tensions. Other factors hampering growth were persistent sizeable government deficits, currency fluctuations and ongoing high levels of unemployment in many industrialised countries. The situation in the international financial markets was highly volatile.

EMEA (Europe, Middle East and Africa)

The economy in the EMEA region as a whole saw growth of 1.5 percent in 2014 (2013: 0.7 percent). Industrial production rose by 1.4 percent, compared with a fall of 0.3 percent in 2013. These figures were also lower than had originally been forecast.

Once again, there were substantial variations in economic trends in the various EMEA sub-regions. In Western Europe, there was a moderate increase in economic output of 1.2 percent (2013: 0.2 percent). Industrial production in this sub-region rose slightly in 2014, by 1.0 percent, compared with a fall in 2013 of 0.9 percent. Of the major economies in Western Europe, Germany and the UK saw relatively robust trends. In Germany, GDP rose by 1.5 percent in 2014 (2013: 0.2 percent), while the UK achieved an even higher increase of 2.6 percent (2013: 1.7 percent). The economies of Spain and Portugal picked up in 2014, seeing slight growth for the first time after years of recession, while GDP in Italy fell for the third year in succession. France achieved only a slight increase in economic output.

In Eastern Europe, the economy continued to slow down. Whereas growth of 1.6 percent was achieved here in 2013, the economy expanded by only 1.4 percent in 2014, mainly as a result of weak economic activity in Russia. Industrial production in Eastern Europe, on the other hand, accelerated slightly, rising by 2.1 percent (2013: 1.1 percent). This trend was boosted in particular by positive momentum in Poland, Hungary and the Czech Republic.

In the Middle East, economic growth remained strong in 2014. GDP rose here by 4.2 percent, the same rate of increase as in 2013.

In the African economies, positive trends continued. GDP for Africa as a whole rose during the financial year by 4.1 percent (2013: 3.8 percent). There were, however, significant differences here too between individual countries: for example, the economy in South Africa grew by only 1.6 percent in 2014 (2013: 1.9 percent). Against a background of numerous strikes, industrial production here increased by only 1.0 percent (2013: 1.3 percent).

Asia/Pacific

The most favourable economic trends in 2014 were once again to be seen in the Asia/Pacific region. Here, GDP rose by 5.6 percent and industrial production by 5.5 percent. Similarly high increases were achieved in 2013, with growth in both GDP and IP of 5.5 percent.

In China, robust economic trends continued, although the rate of growth was slightly lower than in the prior year. In 2014, GDP here rose by 7.3 percent (2013: 7.7 percent), while industrial production expanded by 8.4 percent (2013: 9.7 percent).

In South & East Asia, economic output was up 4.8 percent in 2014, a faster rate of increase than the figure of 4.4 percent seen in 2013. Industrial production here rose by 2.6 percent (2013: 2.2 percent).

In Australia, the economic situation did not improve significantly in 2014. Although GDP increased by 2.9 percent (2013: 2.3 percent) and industrial production rose by 4.1 percent (2013: 3.6 percent), this growth was affected particularly by the mining industry, in which demand for industrial gases is relatively low. The mood in the manufacturing sector, on the other hand, continued to deteriorate.

Americas

Economic trends in the United States in 2014 were relatively robust. GDP increased here by 2.3 percent (2013: 2.2 percent), while industrial production expanded by 3.9 percent (2013: 2.9 percent).

In South America, on the other hand, the economic environment was weak. GDP here rose by only 0.7 percent, compared with an increase of 3.0 percent in 2013. Industrial production even declined. Economists have calculated a decrease of 2.2 percent in IP in this region in 2014, whereas in 2013 IP rose here by 1.5 percent. In Brazil, Argentina, Chile and Venezuela in particular, the economy was characterised by sluggish domestic demand and modest export business.