Construction machinery market optimistic in Europe and India

Vania Goncalves 8 Aug 2016 GLOBAL BUSINESS

The European and Indian construction machinery markets have shown growth this year, while other regions have seen a slow-down, according to Germany’s engineering association the VDMA.

Latest research from the Construction Equipment and Building Material Machinery arm of the VDMA suggests that the machinery sector has grown in regions including France, Germany and India.

The Middle East and North America, on the other hand, have registered drops in machinery sales, in addition to the weak markets of Latin America, Africa and parts of Asia.

After five years of recession, China still hasn’t recovered from a loss of an accumulated 80% of its volume, says the report.

The research also anticipates a drop in the global construction machinery sales due to regional developments, even though German manufacturers are set to register a slight turnover increase of 3%.

Johann Sailer, VDMA chairman, said: “This is primarily due to the strong European market.”

However, growth might not be equal for all manufacturers, added Sailer: “Depending on where a company’s focuses lie individual results could still be on the negative side.”

Building material machinery update

The report from the VDMA also examines the building material plant and machinery business.

The sector is subject to less instability than the construction machinery sector. Nevertheless, manufacturers depend on long-term stable growth markets and these are deficient at the moment — due to the Russian market breakdown. Only Central Europe, India and North America are rated as satisfactory.

Overcapacities also present a challenge for manufacturers. When it comes to this, the sector automatically thinks about China, says the association.

“We don’t expect suppliers from China to flood the market with their equipment but the trend is clear – when domestic markets are weak companies shift to export markets,” said Sailer.

In addition, political and economic uncertainties are present in many sectors. “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.

Overall, the VDMA concluded that “the construction equipment and building material machinery industry is indeed a growth sector”.

Pictured: The R 960 SME crawler excavator from Germany-based manufacturer Liebherr.

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