2007 Economic Overview
• Latter part of 2007 saw hikes in interest rates and unsettled financial market conditions which may lead to slower spending in our end user markets.
• Weak US Dollar exchange rate hits competitiveness both in US and in other dollar denominated markets worldwide.
• Manufacturing activity slowed in developed countries, primarily due to constrained gaps in skilled labour and raw materials, with the volume of new orders growing but at a slower rate compared to previous years.
• Downturn in factory orders for capital goods hints that many firms have already begun to cut back on investment.
• Commodities in each sector have reached record highs (prices) in the last quarter of 2007 despite the emerging slowdown in the US economy.
• At the same time, concerns about security of supply have intensified globally.(Supply chain disruption/geo-political risks)
General Energy Overview
• Power & Utilities companies appear much more ready to make the changes necessary to reverse the effects of climate change.
• Renewable & nuclear power appear high on many companies’ agendas & they appear ready to invest in efficiency.
• Companies expect wind & nuclear power to provide an increasing share of their markets’ energy consumption in the next 5 years.
• In Europe, there has been a continued and unprecedented level of M&A activity in the power utilities market following various EU reforms of the market. (EU Emissions Trading Scheme, for example).
• Upstream Oil & gas markets remain buoyant worldwide, driven by increasing demand and high prices.
• New demand in many sectors is being driven by China & India as well as the FSU.
• Low carbon footprint will become more important & should lead to investment in alternative energy sources such as wind power.
• Globally, energy markets, upstream & power, will continue at current pace.
Upstream Oil & Gas Sector
• Upstream Oil & gas...