VDMA optimistic for 2016 but highlights great differences across markets


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, chairman 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. These are figures the manufacturers of building material machines would also like to post.

“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 overall sectoral turnover of €13.3bn – with €9bn for construction equipment and €4.3bn for the building material machinery sector – is likely to be mirrored by the sector in 2016.

The heterogeneous nature of the construction machinery markets is once again the determining theme for manufacturers of construction equipment. 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, and 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, and, with ongoing 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, also adding 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.”

August 5, 2016

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Tom Stone is Editor of the iVT brand – which includes digital and print editions of a quarterly magazine and the Advanced Lift-truck supplement, as well as ivtinternational.com, which is updated daily. Tom has met and interviewed some of the world's leading industrial vehicle OEM presidents, CEOs and MDs, and takes great pride in cementing iVT's place as the leading forum for debate within the industry, a reputation that his been built up over the brand's 25-year history.

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