Turnover achieved by German manufacturers of construction equipment in 2014 grew by eight per cent, equaling 8.4 billion EUR in total, and, with this, is higher than was originally expected. This amount is about the same as was reached in 2006.
"Turnover is one thing, profit is another," Mr Joachim Strobel, Deputy Chairman of the Construction Equipment and Building Material Machinery Association of the German Engineering Federation (VDMA) and Managing Director of Liebherr EMtec GmbH put the figures in perspective. The short time space in which new European exhaust emissions regulations come into effect meant extremely high investments in development, which were not self-financing, he explained. First of all, newly developed machinery needs to be put to market and sold to customers. For the current year, the German construction machinery industry is only expecting a sideways trend in total, as the businesses in very good and less prosperous markets tend to equal out.
Mr Strobel did not forecast any threatening to the relevant manufacturers' existences, although he did admit that long-term planning is becoming increasingly more difficult: "In former years, we were used to seeing 7-year-cycles - this is a thing of the past." In 2014, there was a strong spring, a long summer slump and finally again a significant improvement of the situation towards the end of the year. At the bottom line, incoming orders were seven per cent higher than in the previous year. This is mainly due to the good demand in earth moving and road construction equipment. Large equipment, however, have been sold much less,
mainly due to the difficult situation of the global mining industry, he said.
In 2014, the German market exceeded all expectation with its growth of nine per cent and showed stability once again. Companies are expecting the market to also develop in a positive way in 2015, even though there is not too much room for improvement on the domestic market, Mr Strobel said. Portugal and Spain are slowly emerging again, however, starting at a very low level. The highest demand was in road building machinery. Slowly, the European construction economy seems to return to growth, even though there are dark clouds on the French sky. The fact that business is missing in Russia is also worrying.
Business with the USA is on an upturn and there are positive signs also for 2015. The same is true for the MENA-countries, particularly Saudi-Arabia. In contrast to this, BRIC did not fulfill their promise. In China, the industry had to cope with the third double-digit decline in a row. There is no sign of a reversal in trend for 2015, with machinery being very modern and surplus capacities enormous there. In India, admittedly, the construction industry's mood has improved, but with no direct effect on sales yet. South America as well as the African continent is still behind expectations; only Egypt provides boost with the expansion of the Suez Canal.