VDMA Construction Equipment and Building Material Machinery: Great Differences across Markets

Construction Machinery: Growth only in Europe and India The heterogeneous nature of the 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. 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 comments, 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." Construction Machinery: Growth only in Europe and India The heterogeneous nature of the 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. 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 comments, 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."