Our operating environment
With low commodity prices for most of the year, mining companies continued to adjust to the weak market and focused their efforts on cost reduction and on asset and production optimization. The capital expenditure of major miners continued to decline. Many mining companies continued with asset-disposals in an effort to protect their balance sheets. The industry saw further mine closures and curtailments. In metal recycling, low scrap prices continued throughout 2016 negatively impacting the demand for new equipment and services.
On the aggregates side, the global construction industry regained strength after a relatively sluggish 2015. On a regional basis, the North American construction sector continued to improve as did the Indian market, while China's weakened economic growth put pressure on infrastructure investments. Europe saw signs of improvement, especially in Northern Europe.
In oil and gas, low price environment was reflected in capital spending discipline and continued cost-cutting programs with midstream and downstream projects put on hold as well. Whereas midstream was impacted early in 2016 the impact on downstream projects became visible only in the second half of 2016. Demand for services and replacements remained relatively stable throughout the year. The activity level of pulp and paper flow control cooled in 2016, driven by the lack of large investments compared to the previous years. However, this does not reflect a decline in the demand; rather, it was more of a project timing issue. The future outlook for pulp and paper investments remains relatively healthy.