Economic and political factors
In December 2016, the core consumer price index (CPI) came in at 0.8% for the fourth consecutive month, well below the target rate of 2%. Continued low CPI has an impact on revenues as many operational contracts specify parking price increases in line with CPI.
Euro area annual inflation is expected to be 1.1% in December 2016, up from 0.6% in November 2016, according to a flash estimate from Eurostat, the statistical office of the European Union.
In contrast to this relatively steady economic picture, 2016 was a year of unprecedented political change in Europe and beyond. The decision of the majority of British voters to leave the EU has generated uncertainty about the terms of the Brexit and the prospects for international businesses operating in the UK.
Since a significant part of Q-Park’s business is located in the UK, we are monitoring the situation closely, particularly with respect to currency risk. This despite the fact that, as agreed with our shareholders, Q-Park does not hedge currency risk.
Local authorities around Europe are constantly searching for ways to make their communities more liveable. Major cities are expanding their pedestrian areas and nudging car traffic away from city centres (see side bar 'Turning motorists into pedestrians'). However, many local authorities recognise the value of cars to the local economy for work and leisure.
Q-Park works closely with many municipalities to analyse changing patterns of mobility and come up with innovative responses. For instance parking capacity management systems in which organisations that have city parking for their employees during the day make those spaces available to residents at night.