Welcome!

News Feed Item

Huge Investment Opportunities Return to Western Europe, according to IHS Study

Findings from a multi-sector study carried out by IHS Inc. (NYSE: IHS), the leading global source of critical information and insight, were released at the IHS Forum in Berlin. As Western Europe returns to growth, the automotive, renewable energy and technology industries offer billion-dollar growth opportunities.

Key findings:

  • IHS Economics: The gap between Germany and the rest of Western Europe is growing; France is struggling to keep up;
  • IHS Chemical: German and European chemical producers expect marginal growth in 2014; German producers slightly optimistic about outlook, but European chemical companies must adapt quickly to be competitive;
  • IHS Energy: The European energy sector is experiencing a transformational shift driven by EU energy and climate policy; Renewable capacity to grow fastest in the UK;
  • IHS Automotive: Europe will overtake North American sales to be the second largest light vehicle market in the world before 2020; Germany will be Europe’s largest automotive market for next five years;
  • IHS Technology: Western Europe will invest €30 billion in next generation broadband to tap into future economic and social benefits;
  • IHS Defence: NATO will account for less than half of all defence spending by 2020 as Russia’s defence budget triples in three years.

Germany economy goes from strength to strength as it leads regional growth

“The developed economies are pushing growth back to the Eurozone. But, Germany’s star will rise faster and higher than the rest in the next three years,” Nariman Behravesh, chief economist for IHS said.

Germany’s most reliable leading indicators, the purchasing managers’ and the Ifo business expectations indices, have recovered markedly since hitting cyclical lows during the second half of 2012, and the moderate downward correction in February–March 2014 is expected to be an interruption, but not a trend reversal.

“Domestic strength due to structural labor-market conditions, expansionary monetary and fiscal policy as well as rising domestic demand all underpin Germany’s economic growth,” Behravesh said. He added that “Germany does face some serious competitive challenges in the medium- to long-term because of rising energy costs and poor productivity growth.”

France struggles to keep up

“The prospects for the Eurozone have improved in recent months. However, as growth returns to the region, France is struggling to keep up,” said Diego Iscaro, senior economist at IHS.

“We expect France to continue to lag behind Germany over the coming years. Although the measures announced by the government in recent months, which included lowering employers’ social security contribution and cutting some taxes, are positive and go in the right direction, France needs to do more to fix its deeply rooted structural problems, such as high labour costs and a rigid labour market,” Iscaro said.

Confidence returns to European and German chemical industry

The German chemical industry’s outlook is slightly more optimistic than the rest of Europe. “Even though growth is expected to occur at a slow pace, German producers are more optimistic than others in Europe,” John Page, vice president of consulting at IHS Chemical said.

“This optimism is largely because the German economy is one of the strongest economies in the region, the country has a much larger and more robust manufacturing base than the rest of Europe, and their facilities are more up-to-date from a technology standpoint than the rest of Europe. Most companies expect the German chemical business to pick up in the coming months, also in part due to increasing domestic demand,” Page said.

“At IHS, we expect an overall increase in German chemical production of 2 percent for 2014, so we are talking about sluggish growth here, but it is growth nevertheless,” he said.

Competition will force evolution of Europe’s chemical sector

Over time, the European chemical industry has seen a gradual change in its fortunes, with growing costs and a competitive market with many players. Faced with uncompetitive energy prices and stagnating demand, European chemical companies must adapt quickly or suffer the consequences.

“European chemical companies will face continued tough competition from Middle Eastern, Chinese and, increasingly, US producers benefiting from cheap energy and feedstocks,” said Michael Smith, vice president at IHS Chemical.

2030 EU energy and climate policy targets push energy sector reform

The EU’s ambitious 2030 target of 40 percent greenhouse gas reduction in Europe requires continued investment in renewables and a fundamental transformation of the European energy sector amid rising concerns over subsidy costs and competitiveness.

By 2030, renewable capacity in Europe is expected to grow by 297GW led by the UK and Germany.

The shale gas boom has shifted the global context for European energy policy, with low US energy prices adding further pressure to reduce costs of the European decarbonisation process.

Technology improvements and changes in policy and market design are necessary to support the build out and integration of renewables in a cost-effective manner in Europe as the decarbonisation policy has resulted in rising energy prices for end consumers.

Europe will overtake North America to be the world’s second largest light vehicle sales market

According to IHS Automotive forecasts, by 2018/2019, Europe will overtake North America to be the second largest light vehicle sales market in the world. The 21 million light vehicle units sold in Europe will be second only to China.

IHS Automotive forecasts European production volumes will grow by 21 percent by 2020, on par with a 19 percent increase in European export volumes.

“Despite increasing competitiveness in the global marketplace, Germany will be the biggest light vehicle market in Europe until the end of the decade,” said Carlos DaSilva, manager at IHS Automotive.

“By 2020, Germany will have increased its light vehicle production output by 17 percent, approximately 840,000 units, while other major European markets, like France, UK, Italy and Spain will see their output decrease or remain flat,” he said.

Mario Franjicevic, a senior analyst at IHS Automotive, added: “By 2020, German OEMs are anticipated to be responsible for 70 percent of the global production output of premium brands. We also anticipate that by 2020 German OEMs will have an estimated global plant capacity utilization of about 88 percent compared to an 80 percent global industry average estimate.”

Western Europe’s €30 billion broadband boost

Over €30 billion will be invested in the next three years in Western Europe’s broadband sector. Across Germany, France, UK, Italy and Spain, government bodies and telecommunication companies will spend €200 per household on next-generation broadband rollout.

“Across Europe’s big-five, companies and governments are looking to tap into the future economic and social benefits of having a future-proofed broadband network,” said Richard Broughton, head of broadband analysis at IHS Technology.

Germany’s Deutsche Telekom made headlines when it committed in 2012 to a headline investment of €30 billion in high-speed broadband technology in the years to 2015. Deutsche Telekom intends to ensure that 65 percent of homes are covered by its fibre-to-the-cabinet (FTTC) network by 2016, with new ‘vectoring’ technology being deployed to raise transmission rates to 100Mbs.

In 2013, the French government set out plans to invest €20 billion of public and private funds in next-generation fixed and mobile broadband, aiming to cover half of the population by 2017, with the remaining homes covered within a further five years.

“Crucially, the government’s plans have stratified investment, asking ISPs to fund urban coverage, while providing a mixture of state and local government funding to ensure that semi-urban and rural areas are connected,” Broughton said.

Almost €9 billion will be invested across the UK, Spain and Italy as governments set targets to expand next-generation mobile and broadband networks.

European defence sector struggles as Russia booms

“In 2013, 13 of the 20 fastest shrinking defence budgets belonged to NATO member states,” said Craig Caffrey, budget analyst IHS Aerospace, Defence and Security.

“As a result, NATO will be outspent by the rest of the world for the first time by 2020 despite being home to nearly two-thirds of global defence spending as recently as 2009. When we look at the last three years, defence spending in Asia and particularly in the Middle East has grown rapidly and this shift Eastward in global defence spending will be a trend that will continue over the remainder of the decade,” Caffrey said.

By contrast, Russian spending on defence doubled between 2007 and 2013, and will have tripled by 2016. Russia’s defence budget reached $78.1 billion in 2014, making it the third largest defence spender globally. Defence and security-related spending now accounts for 33 percent of the state budget, compared with 23 percent in 2010. By 2020, Russia’s defence budget is expected to reach $130.8 billion.

“Russia has increased spending on defence rapidly over the last three years. The country averaged 18 percent yearly growth since 2010 and under current plans this rate is set to increase to 22 percent in 2015,” Caffrey said.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs more than 8,000 people in 31 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. © 2014 IHS Inc. All rights reserved.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
The 21st International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
SYS-CON Events announced today that Hitachi Data Systems, a wholly owned subsidiary of Hitachi LTD., will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City. Hitachi Data Systems (HDS) will be featuring the Hitachi Content Platform (HCP) portfolio. This is the industry’s only offering that allows organizations to bring together object storage, file sync and share, cloud storage gateways, and sophisticated search and...
SYS-CON Events announced today that Progress, a global leader in application development, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Enterprises today are rapidly adopting the cloud, while continuing to retain business-critical/sensitive data inside the firewall. This is creating two separate data silos – one inside the firewall and the other outside the firewall. Cloud ISVs oft...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that Peak 10, Inc., a national IT infrastructure and cloud services provider, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Peak 10 provides reliable, tailored data center and network services, cloud and managed services. Its solutions are designed to scale and adapt to customers’ changing business needs, enabling them to lower costs, improve performance and focus intern...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that Cloud Academy will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud computing technologies. Ge...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
SYS-CON Events announced today that Interoute has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Interoute is the owner operator of Europe's largest network and a global cloud services platform, which encompasses over 70,000 km of lit fiber, 15 data centers, 17 virtual data centers and 33 colocation centers, with connections to 195 additional partner data centers. Our full-service Unifie...
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry’s single source for the cloud. Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud...
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Detecting internal user threats in the Big Data eco-system is challenging and cumbersome. Many organizations monitor internal usage of the Big Data eco-system using a set of alerts. This is not a scalable process given the increase in the number of alerts with the accelerating growth in data volume and user base. Organizations are increasingly leveraging machine learning to monitor only those data elements that are sensitive and critical, autonomously establish monitoring policies, and to detect...