The German construction equipment manufacturing association reports wide variations in business activity across different markets. Overall, the 1331 VDMA reports that for construction equipment, the 2016 growth forecast remains at over 3%.
According to the VDMA, German construction equipment manufacturers remain cautiously optimistic at the middle of the year. “After a great bauma trade fair in April we are again in the midst of our daily business – which holds a number of challenges and uncertainties,” said Johann Sailer,cChairman of the VDMA Construction Equipment and Building Material Machinery Industry Association.
After six months of 2016, turnover among member companies in the construction machinery sector practically stands at last year’s level, and the tendency for the rest of the year points slightly upwards. “Apart from individual orders in April the sector is still waiting for a demand push. We cannot talk of an upswing here,” said Sailer. Last year’s turnover of €9 billion for construction equipment is likely to be mirrored by the sector in 2016.
However, the VDMA adds a note of caution that construction machinery growth is likely to be seen only in Europe and India. North America and the Middle East, two of the most important growth markets of the past few years, are seeing drops in machinery sales this year – not least due to the continuing weakness in the oil and gas sector. This is compounded by the still weak markets of Latin America, Africa and large parts of Asia. Formerly the largest market, China is still not back on its feet and will, after five years of recession, have lost close to an accumulated 80% of its volume. In Asia it is only the Indian construction equipment market that is growing, stimulated by increased investments in road building.
The European market looks positive in 2016. Growth drivers are France – where the construction machinery business is benefitting from a special depreciation scheme – and southern European countries. Northern and Western Europe are again stable. The German market stands at a high level and was able to post further growth in 2016. Only Central and Eastern Europe fell short of expectations this year. Constituting a special case is the construction machinery market in Turkey. Due to recently strong growth, questions are being raised about overheating and the danger of a bubble economy. Together with the political instability the Turkish construction machinery market could still see a hard landing.
While a drop is anticipated for global construction machinery sales due to regional developments, German manufacturers are confident of a slight turnover increase of 3% at sectoral level. “This is primarily due to the strong European market,” Sailer said, but makes clear also that growth will not be evenly spread for all manufacturers: “Depending on where a company’s focuses lie individual results could still be on the negative side.”
It is fair to say for all sub-sectors that the political and economic uncertainties in many areas are huge and there is growing instability. “We don’t want to just keep talking about crises and many current issues do not even have a direct impact on the construction sector. But obviously, news of this kind always affect the investment climate among our customers,” said Sailer.
According to the VDMA, German construction equipment manufacturers remain cautiously optimistic at the middle of the year. “After a great bauma trade fair in April we are again in the midst of our daily business – which holds a number of challenges and uncertainties,” said Johann Sailer,cChairman of the VDMA Construction Equipment and Building Material Machinery Industry Association.
After six months of 2016, turnover among member companies in the construction machinery sector practically stands at last year’s level, and the tendency for the rest of the year points slightly upwards. “Apart from individual orders in April the sector is still waiting for a demand push. We cannot talk of an upswing here,” said Sailer. Last year’s turnover of €9 billion for construction equipment is likely to be mirrored by the sector in 2016.
However, the VDMA adds a note of caution that construction machinery growth is likely to be seen only in Europe and India. North America and the Middle East, two of the most important growth markets of the past few years, are seeing drops in machinery sales this year – not least due to the continuing weakness in the oil and gas sector. This is compounded by the still weak markets of Latin America, Africa and large parts of Asia. Formerly the largest market, China is still not back on its feet and will, after five years of recession, have lost close to an accumulated 80% of its volume. In Asia it is only the Indian construction equipment market that is growing, stimulated by increased investments in road building.
The European market looks positive in 2016. Growth drivers are France – where the construction machinery business is benefitting from a special depreciation scheme – and southern European countries. Northern and Western Europe are again stable. The German market stands at a high level and was able to post further growth in 2016. Only Central and Eastern Europe fell short of expectations this year. Constituting a special case is the construction machinery market in Turkey. Due to recently strong growth, questions are being raised about overheating and the danger of a bubble economy. Together with the political instability the Turkish construction machinery market could still see a hard landing.
While a drop is anticipated for global construction machinery sales due to regional developments, German manufacturers are confident of a slight turnover increase of 3% at sectoral level. “This is primarily due to the strong European market,” Sailer said, but makes clear also that growth will not be evenly spread for all manufacturers: “Depending on where a company’s focuses lie individual results could still be on the negative side.”
It is fair to say for all sub-sectors that the political and economic uncertainties in many areas are huge and there is growing instability. “We don’t want to just keep talking about crises and many current issues do not even have a direct impact on the construction sector. But obviously, news of this kind always affect the investment climate among our customers,” said Sailer.
