Market outlook

The power generation market is expected to remain on a good level in 2012, but due to macroeconomic issues, significant growth is not foreseen. The growing emerging markets will continue to invest in new power generation capacity, which will drive demand - especially in the flexible baseload segment. In the OECD countries, there is still pent-up power sector demand, mainly driven by CO2 neutral generation and the ramp down of older, mainly coal-based generation.

The outlook for vessel contracting activity during 2012 is cautious, with overall levels of contracting expected to be about the same or slightly lower than during 2011. The contracting mix is expected to be in line with that seen in 2011, favouring contracting for specialised vessel segments. The contracting outlook is gloomy for certain ship types, including bulk carriers and tankers, due to overcapacity. The segments with a positive outlook are in line with Wärtsilä’s Ship Power strength areas. Contracting for LNG carriers is expected to remain strong compared to historical levels, albeit lower than the level of contracting seen in 2011. The offshore segment continues to present good future contracting opportunities, especially for drilling and floating production units.

There are no major changes in the Services market outlook for 2012. Overall economic uncertainty still prevails. The best prospects continue to be in the BRIC countries, while conditions are expected to continue to be weakest in Europe. In the short term, development of the active installed base is also expected to be moderate, with the scrapping, layups, slow steaming, and lower utilisation rates of vessels likely to continue. The power plant service market is expected to develop steadily.

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