Report: Global wire and cable demand slows amid weak European, East Asian economies
London-based analyst firm says the world market for wire and cable is witnessing high levels of divergence, as demand for these products contracts in the developed European and East Asian economies.
According to the latest Wire & Cable Global Data Service from Integer Research (London), the world market for wire and cable is witnessing high levels of divergence as demand for these products contracts in the developed European and East Asian economies.
The market analyst firm states that the global economy as a whole achieved a mild recovery in 2014, with a resilient US economy, but a weak Eurozone economy. Elsewhere, China, India and other emerging countries showed signs of an economic slowdown, determines Integer Research, while both Russia and Brazil have shown signs of weakening.
According to the new report, while overall global demand for wire and cable grew at 3.2% year-on-year from 2008 to 2014, the latest research shows that global growth in the cable market is expected to slow to just 2% year-on-year in 2015. The report concludes that economic conditions in Japan and South Korea in particular are weighing down the global wire and cable market.
"Looking at detailed figures from the latest Wire & Cable Global Data Service, there has been a marked decline in demand for insulated wire and cable in both Japan and South Korea," said Integer Research in a press statement. "The recession in Japan has been deeper than expected, hitting fixed investment. Lackluster construction activity and delays in building new power plants, due to a slowdown in both economies, have hit the region's wire and cable demand hard. Many of the leading cable makers in these two countries have seen a decline in their revenues and profit margins."
Mixed global fortunes in this market abound, finds the researcher. "While the marked decline in growth across Europe and East Asia is a concern for many in the industry, there are regions which buck the trend, such as Africa and the Middle East, and to some extent Southeast Asia, where there has been greater focus on new infrastructure and investment opportunities," continued the researcher.
Integer's latest data indicates that despite the constraints to growth due to conflict across the Middle East and Africa, this remains a region where demand is expanding in the power and construction sectors. Both energy and data cable are expected to see strong growth, as the state policies adopted in the aftermath of the Arab Spring have continued to boost infrastructure development - particularly within the GCC. But this is also at risk if oil prices stay at levels below US$80/bbl, adds the study. Africa, Libya, Nigeria and Morocco are also cited key markets that are expected to see solid growth in the next five years.