Germany: construction machinery manufacturers await upsurge

German construction equipment manufacturers remain optimistic but cautious at the middle of the year, claims VDMA Construction Equipment and Building Material Machinery Industry Association (VDMA)

“Apart from individual orders in April, the sector is still waiting for a demand push. We cannot talk of an upswing here,” Johann Sailer, chairman of the VDMA. “We are again in the midst of our daily business – which holds a number of challenges and uncertainties.”

Last year’s overall sectoral turnover of EUR13.3bn – with EUR9bn for construction equipment and EUR4.3bn for the building material machinery sector – is likely to be mirrored by the sector in 2016.

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, too. Only central and eastern Europe fell short of expectations this year.

However, Turkey’s recent strong growth in the construction sector has raised questions 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”, says the VDMA.

North America and the Middle East, two of the most important growth markets of the past few years, are seeing a fall 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 per cent of its volume, says the VDMA. In Asia it is only the Indian construction equipment market that is growing, stimulated by increased investments in road building.