ZVO expects declining business development
The members of the ZVO Chemical and Plant Division and the ZVO Industrial Coating Division expect sales to decline, particularly in the second half of 2024. The outlook for 2025 is also subdued.
After a satisfactory sales performance in the first quarter of 2024, the business development and business prospects of the ZVO's Chemicals and Plants Division have deteriorated noticeably over the course of the year, according to the German Surface Technology Association (ZVO). The autumn meeting of the division on September 11, 2024 was characterized by constructive discussions on the difficult situation. After an acceptable first quarter, the situation in the chemicals sector has deteriorated considerably. Business is currently down more than 5% on the previous year on average, and no impetus for a turnaround is expected by the end of the year. In the plant and equipment sector, capacity utilization is still good, but the order backlog is declining noticeably. New project contracts are very sporadic, if at all then only after very lengthy discussions.
Cautious outlook for 2025
The outlook for 2025 is very cautious. The discussion has shown that there is great dissatisfaction with the political framework conditions and that no impetus is expected before the 2025 elections. This results in the business expectation for 2025 that the specialist area member companies would already be satisfied on average with business at the level of 2024. Overall, the tenor of the discussions was positive despite the difficult conditions and the lack of an outlook. The member companies consider themselves to be flexibly positioned and are confident that they are strong enough to deal with the challenges.
The Industrial Coating Division met on September 25, 2024. While half of the members recorded significant declines in turnover in 2023, the other half recorded an increase in turnover due to higher prices; however, volume growth remained well below turnover growth. On a consolidated basis, the specialist area members recorded a slight increase in turnover in the low single-digit range in 2023. Expectations for 2024 were predominantly cautiously optimistic, with stagnation at the 2023 level being a positive surprise. For the second half of 2024 in particular, the majority of department members expected a downturn. This assessment proved to be correct, as the survey of the economic situation at the autumn meeting showed. After a reasonably satisfactory start in the first half of 2024, sales have fallen since June 2024, in some cases dramatically. Overall, the Industrial Coating specialist area expects its turnover to fall by 10 to 15 percent in 2024. Due to the political framework conditions and the poor global mood, the customer markets continue to lack optimism and confidence.
High energy costs and little investment
The burden of energy costs has continued to fall, but energy costs remain too high by international standards. Grid fees, which now account for up to 50% of total energy costs, have become a permanent cost burden without any entrepreneurial influence. New investments are being postponed or have been canceled altogether. Investments that are made serve to increase energy efficiency and modernize existing plants. In the personnel sector, the pressure to find suitable specialist staff has eased. Temporary employment agencies are also able to offer workers again. However, high wage settlements have led to a further increase in personnel costs, both for our own staff and for temporary workers.