In 2011, KONE’s operating environment remained mixed throughout the year. The markets in Asia-Pacific grew strongly, while new equipment markets remained at a weak level in many countries in Europe and North America. In the Europe, Middle East and Africa (EMEA) region, activity in most new equipment markets in Central and North Europe grew, while South European markets remained stable at a weak level. The new equipment market in the Americas region recovered gradually but was still at a low level at the end of year. The new equipment markets in Asia-Pacific grew rapidly. Activity in major projects was at a high level, in Asia-Pacific and the Middle East in particular. Modernization markets grew slightly but with regional variations. Maintenance markets continued to develop favorably in all regions. The prolonged weakness in the new equipment markets in particular in South Europe and North America has further intensified price competition in all businesses during the year.
In the EMEA region, the new equipment market in Central and North Europe grew during the first half and levelled off during the second half of the year. The new equipment market in Germany grew throughout the year driven by the residential segment. The markets in the Nordic countries, excluding Denmark, grew during the first half of the year with the growth levelling off towards the end of the year. The new equipment market in the United Kingdom was twofold with the greater London area developing positively throughout the year but with the rest of the market being clearly weaker. The markets in the Netherlands and Denmark were weak. In Belgium, the new equipment market grew in the first three quarters and showed signs of a slight decline in the last quarter of the year. Activity in France grew driven by the residential segment. The new equipment markets in Italy and Spain were weak throughout the year and declined further towards the end of the year. In many South European countries, the office segment was burdened by high vacancy rates, while the infrastructure, hotel, medical and educational segments offered selected opportunities. In the Middle East, the new equipment market grew strongly in Saudi Arabia. Market activity in Russia increased throughout the year. The modernization markets developed positively in Central and North Europe, but declined in South Europe due in particular to a decline in the market in France. Maintenance markets continued to develop well in the EMEA region, but price competition became increasingly intense.
In the Americas region, the new equipment market recovered gradually from a low level. The gradual recovery of the new equipment market in the United States continued throughout the year, but the market remained at a low level. There were significant regional variations in the market situation across the United States. The East and West Coast and Texas markets developed the most favorably. Activity in the infrastructure segment was at a low level in the United States. Activity in the new equipment market in Canada was at a good level and the recovery of the new equipment market in Mexico progressed throughout the year. Modernization markets grew slightly. Maintenance markets in the Americas developed well, but price competition remained intense.
In the Asia-Pacific region, the new equipment markets grew rapidly in 2011, although the growth rate declined towards the end of the year. The new equipment market in China grew strongly in particular during the first three quarters of the year. The growth rate declined towards the end of the year as a result of the Chinese government’s measures to reduce the real estate market’s growth rate and overall inflation, but activity remained at a high level. The fastest growing segment in China was the affordable housing segment. All other segments except for the infrastructure segment also grew rapidly, in the inland lower-tier cities in particular. The retail, office, hotel and medical segments developed well, while the public transport segment was negatively impacted in the second half of the year by the re-evaluation of high-speed rail investments. In India, the new equipment market grew strongly in the first half followed by a lower growth rate in the second half of the year due to financing constraints. In Australia, the new equipment market developed positively in the first three quarters of the year, but declined in the last quarter of the year as a result of longer lead times in decision-making due to a weakened general economic sentiment. The modernization market in Australia grew throughout the year. The Southeast Asian new equipment markets were strong throughout the year, in Malaysia, Singapore and Indonesia in particular. The growth was primarily driven by the residential, multiuse building and office segments. Maintenance markets in Asia-Pacific developed favorably. The pricing environment remained challenging in all markets.