SCH2017_DRF_EN_Livre.indb

4

Business review Trends in Schneider Electric’s core markets

1. Trends in Schneider Electric’s core markets

Industry and machines manufacturers

1.1

In 2017 the industry market enjoyed a strong and broad-based recovery across the Globe. Global machinery production has benefited from investments rebound in extraction, commodity processing and intermediate goods industries, and continuing growth in consumer led sectors. In Western Europe, the market recovery was driven by both internal and external demand, supportive credit conditions and sharp decline in political uncertainty.

IIoT, Digitization and Cybersecurity were at the heart of discussions and they will go on driving the industry by allowing costs optimization with more creative and sustainable solutions, fit-for-purpose design and digital transformation of operations.

Non-residential and residential buildings

1.2

Non residential buildings In Western Europe, increased business confidence played a major role in the market’s recovery. In Germany, increased demand in the automotive and retail sectors led to the growth. In France, the market growth has improved, mainly thanks to the industrial, offices and retail segments. However, growth of public building segments remained negative. In the US, the market continued its’ upward path, driven by office, warehouse, healthcare and Educational segments. Construction in transportation equipment and chemical segments has contracted. In India, non-residential construction benefited from improved business confidence and acceleration of foreign investments. In Australia, non-residential construction growth has eased. In China, Non residential market growth has moderated, with higher growth in office buildings and shopping complexes than in manufacturing building.

Residential In Western Europe, residential construction has continued to grow. In Germany, low interest rates and demand related to migration stimulated growth significantly. In France, the market has rebounded sharply, driven by the government housing policy (both for new construction and renovation) and low interest rates. On the supply side, the delay between construction starts and permits has increased. In the US, market has continued its upward trajectory, albeit at a slowed pace than in 2016. Pace of expansion in housing starts cooled after several years of strong growth following the 2007-2009 market collapse. Reversely, renovation market accelerated in 2017, driven by adaptation of new standards in breakers and repairs works post hurricanes. In India, residential construction picked up mainly due to pronounced government efforts to provide affordable housing through PPP’s and incentives. In Australia, growth in residential construction was underpinned by an increase in demand coming from a high level of migration. Low costs of borrowing also encourage renovation activity. In Australia, the market has slowed down. In China, Residential market continued to grow in 2017 beyond expectations, driven by Tier 2 to 4 cities. Tier one cities market has declined is response to property cooling measures. On the contrary, in Tier 3 & 4 cities, residential construction growth accelerated. The fear of missing out in the property price boom has created an urgency to buy and resulted in a strong growth in housing sales and then in housing starts. Another major contributing factor was the Government shanty-town renovation programme which has involved local Governments building or contracting to build new low-income housing for residents.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

216