palfinger at a glance

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Economic Background
Consolidated Management Report / Market Review
Enormous GDP growth continues
in emerging markets such as China.
Asia’s emerging economies, first and foremost China, continued to perform excellently in 2011.
Despite weakening growth in connection with global developments, outstanding growth rates of
9.2 and 8.2 per cent have been projected in China for 2011 and 2012 respectively. The country has
the necessary financial resources to cope even with scenarios of economic crisis in connection with
banks, the real estate market or increasing wages. However, the population’s growing discontent
with the political situation might become a barrier to growth.
In 2011, financial markets all over the world were marked by great uncertainty and hence high
volatility, which accelerated tremendously in the second half of the year. Many stock markets again
experienced bouts of turbulence, with share prices taking their sharpest plunges in years.
Moreover, increasing fears of recession drove down commodity prices from mid-2011 onwards.
Until April 2011, the oil price rose continuously to more than USD 125. After that, the political instability
in numerous oil-producing countries led to strong volatility at a high level, ranging between
USD 100 and USD 120 for a barrel of Brent crude. At the end of the year, the price for one barrel of
Brent crude was USD 107.30.
In Central and Eastern Europe, the price of natural gas is strongly linked to the oil price due to the
high share of natural gas deliveries from Russia. Therefore, the higher oil price also had a delayed
effect on gas prices in Central and Eastern Europe, driving them up to between 2.5 and 2.8 cent/kWh,
and causing gas energy prices in Europe to increase by 5 to 10 per cent in the second half of 2011,
depending on the provider. On a global scale, however, the gas price rose to a lesser extent than
the oil price.
The higher prices for fossil fuels on the global markets and the nuclear power phase-out policy
adopted in Germany in the second half of the year caused the electricity price at the European
Energy Exchange EEX to stabilize at a high level between 60 and 70 EUR/MWh.
In the second half of 2011, the euro depreciated considerably in light of the economic developments.
After having risen to USD 1.45 as at 30 June 2011, the euro-to-dollar exchange rate at the end of
2011 was USD 1.29, which corresponds to a weakening of the euro by 3.2 per cent compared to the
end-of-year price quoted in 2010. The euro-to-yuan exchange rate showed a similar development:
With the Chinese yuan valued at CNY 8.16 at the end of the year, the euro recorded a loss in value of
7.5 per cent. However, the euro appreciated 8.9 per cent year-on-year against the Brazilian real.
palfinger Annual Report 2011
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