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the significant growth achieved by Asia’s emerging economies
(China +7.8%*, ASEAN 5 - Indonesia /Malaysia/Philippines/
Thailand/Vietnam +5.7%*).
China, in particular, has confirmed a high but lower growth rate
than in the past (+7.8%* versus +9.3%* in 2011 and +10.4%*
in 2010), reflecting the slowdown in demand global as well as
some difficulties in its internal market, in particular a downturn
in the construction sector.
In the United States government stimulus packages have
helped support the recovery in demand (GDP 2012 +2.3%*)
and have led to a gradual decline in the unemployment rate.
In addition, confirmation of the incumbent President Obama
in the presidential election in November and the subsequent
agreement on the fiscal cliff reached between Republicans and
Democrats have produced a further easing of market tensions.
In contrast, Europe has seen a rapid deterioration in economic
activity as a result of prolonged uncertainties in the Eurozone
(GDP 2012 -0.4%* compared with +1.4%* in 2011). In fact, the
downturn has been further exacerbated by the introduction
of deficit-cutting measures in several Eurozone countries (for
example, Greece, Portugal, Spain, Italy and France), involving
not only reductions in spending but also higher taxes.
CABLE INDUSTRY CONTEXT
Growth in higher value-added businesses: submarine, high voltage underground cables
and cables used in the oil industry. Global growth also for the optical fibre market.
The world cable market experienced a slowing in growth
in 2012, reflecting the uncertainty of the macroeconomic
environment and the reduction in investments primarily in
Europe. However, there were major differences within the
industry both geographically and between the various market
segments.
In geographical terms, the scant increase in global cable
demand was driven by high-growth regions, such as the
Middle East, Asia and, albeit to a lesser extent, South
America. In fact, these regions saw continued investment to
expand and upgrade infrastructure and buildings in response
to growing demand by both industrial operators and local
communities. In the United States, the current economic
recovery, supported by government incentives for economic
growth, generated a moderate growth in demand. Lastly, in
Europe the recessionary scenario and debt crisis in several
EU countries further exacerbated not only the construction
market but also infrastructure investment and energy
consumption, resulting in a general reduction in demand for
energy cables and systems.
Even the various market segments displayed great diversity
in 2012. On the one hand, there was a growth in higher
value-added businesses, such as high and extra high
voltage submarine cable connections for Europe’s offshore
wind farms, high voltage underground cables and cables
used in the oil industry, whose major players increased
their investments on the previous year, on the strength of
the high average price of Brent crude, which topped USD
110 per barrel in 2012. Even the optical fibre cable market
increased globally, albeit with significant differences
between geographic areas: in fact, demand increased in
high-growth markets such as China, whose market at the
end of 2012 accounted for about half of the global market
for optical cables, while it decreased in more developed
markets such as France and the United States, due to the
ending of government incentives. On the other hand, there
was stable or declining demand for power distribution cables,
especially in Europe, and for building wires, in line with the
general slowdown of this market especially in some countries
(Spain, Italy, UK). Lastly, demand for copper telecom cables
continued to fall, in line with the trend since 2004 to the
benefit of optical fibre cables.
* Source: IMF, World Economic Outlook Update - January 2013
