Elevator and Escalator Market: Current Situation and Future Ahead
The Top Elevators and Escalators Manufacturers
- Otis Worldwide Corporation
- Mitsubishi Electric Corporation
- Schindler Holding Ltd
- KONE Corporation
- Thyssenkrupp AG
- Fujitec Co., Ltd.
- Hitachi, Ltd.
Elevators and Escalators Market Scenario
Long-term restrictions on people's freedom of movement made it difficult to finish the contracts for new projects and to continue work on existing orders. This particularly impacted the new installation and modernization businesses unit of elevator manufacturers. Though E&E service business continued to fetch business for companies even in this unfavorable environment and is registering growth.
Global Construction Industry Scenario
Prior to the outbreak of the coronavirus (COVID-19), it had been predicted by analysts that there would be an acceleration in the pace of growth in the global construction industry, to 3.1% from 2.6% in 2019. However, given the severe disruption in China and other leading economies worldwide following the outbreak, the forecast for growth in 2020 has now been revised down to 0.5%. The current forecast assumes that the outbreak is contained across all major markets by the end of the second quarter, following which, conditions would allow for a return to normalcy in terms of economic activity and freedom of movement in the second half of the year. However, there will be a lingering and potentially heavy impact on private investment owing to the financial toll that inflicted upon businesses and investors across a wide range of sectors.
The construction work on major commercial projects in key countries has been greatly affected. The disruption caused by the pandemic is likely to be prolonged in the leisure and hospitality buildings sector, reflecting the likely downturn in both domestic and foreign tourism, which could reduce investment in new hotel projects. The residential sector is facing a high risk of a sharp downturn with major developers recording sharp drops in new sales. (Source: Global Construction Outlook to 2024 (COVID-19 Impact)
Especially in China, underlying drivers of growth include ongoing urbanization and the government’s efforts to renovate aging urban residential buildings, years of high levels of investment in real estate have resulted in oversupply, undermining the demand for new space. In January-March 2020, real estate investment in residential buildings had dropped by 7.2% year on year, with the sharpest drop being recorded in the central region, at -16.9%. (Source: Construction in China - Forecast Update)
Impact of COVID-19 on top Elevator manufacturers
1. Otis Worldwide Corporation
2. Mitsubishi Electric Corporation
The current forecast reflects the sluggish markets in various countries and regions and following recovery process, and is based on the assumption that COVID-19 continues to have an impact on revenue and operating profit until the second quarter. The amount of the impact is expected to be a decrease in revenue by 440.0 billion yen and a loss of operating profit by 135.0 billion yen. The current forecast may be modified depending on the global and local situation of the containment of COVID-19. (Source: Company Presentation).
3. Schindler Holding Ltd
4. KONE Corporation
KONE estimates that in 2020, its sales will decline (by 5-10%) or be stable at best at comparable exchange rates as compared to 2019. (Source: Company Presentation).
5. Thyssenkrupp AG
The elevator division was sold in February to a consortium of Advent, Cinven, and Germany's RAG foundation for 17.2 billion euros in order to ease financial pressure on the conglomerate which has struggled for years after a downturn in steel and a series of failed investments. (Source: Company Presentation).
6. Fujitec Co., Ltd.
Touchless technology is a new buzz in Japan, as the Covid-19 crisis is intensifying, a new trend emerged that positively affects the sensor technology players. Taking cues from the trend, Fujitec has launched a model with an optional add-on contactless panel feature that uses infrared sensors to select a destination floor based on the position of the hand on the dashboard. The model was intended for hospitals, pharmaceuticals, manufacturers, and food companies.
7. Hitachi, Ltd.
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