Europe's leader in manufacturing and the utilisation of cranes, Germany, is maintaining its position, confidence is returning and the outlook is positive. Alex Dahm reports
Construction output rose in Germany by 16.2% in March 2011 compared to a year earlier, according to Eurostat. It was the second highest recorded of the 13 European member states for which data is available.
For construction equipment as a whole, 2009 saw sales in Western Europe drop to their lowest level for more than 20 years. A 15% recovery was recorded in 2010 by Off Highway Research. Leading this recovery was Germany as the largest market in 2010, with sales rising nearly 30% to 24,000 units, a quarter of the European total. A severe winter in 2009 meant a slow start to 2010 but it picked up after the first quarter and strongly towards the end of the year.
Boosting the market in Germany has been a government stimulus programme for infrastructure projects like road construction, road widening and bridge improvements. In addition, there have been environmental incentive schemes for domestic, commercial and industrial solar energy installations. As a result confidence is returning to the market.
Unprecedented sales leading up to the economic crash in 2008 left the machinery park well supplied with relatively young machines with low hours. While these block new sales to some extent, supply is beginning to dwindle in some sectors and prices of used machines are showing signs of rising, making it more economical to trade them in and replace them with new. Financing, however, can still be a problem with credit hard to find.
OHR forecasts that demand for construction machinery as a whole in 2011 will still rise but at a lower rate of about 16%. In cranes, the consensus between the largest manufacturers in Germany - Liebherr, Manitowoc, Tadano Faun, Terex - is that the crane market overall is slightly increasing but from a very low level. A 10 to 15% increase in crane sales in the first quarter of 2011 over the same period in 2010 was reported.
Manufacturers all have a positive outlook. Satoru Oyashiki, Tadano Faun president, says "German customers feel better this year. The winter weather was not too bad, they have had a good start and utilisation is good. I feel that customers are positive." Matthias Donner, Liebherr-Werk Biberach managing director, says, "The German market in general is very promising." Klaus Kroeppel, Manitowoc vice president of sales for Central and Eastern Europe, says, "Overall, the market in Germany is reasonably good and, in comparison with some other markets in Europe, it is looking quite positive."
Thomas Schramm, Tadano Faun general manager, sales, concurs, "The German market overall has still been doing relatively well. Other countries have gone down a lot more. We have the impression now that Germany is at a similar level to last year or growing a little. The sentiment is that we are not going down further, we are at the bottom and we can start planning and adjusting fleet sizes. The number of orders for the first three months of the year was better. Compared with 2008 it is still, by a long way, not good but there is growth."
Thomas Hartmann, Terex Cranes sales director, has a similar view, "The future in Germany is bright for the next three or four years. The assessments on tax income are encouraging and it will lead to public investment again in infrastructure, such as autobahns and bridges." Hartmann forecasts that it will be five or six years before the crane market will be back to 2008 levels.
Germany is the world's largest market for all terrain cranes. It remains so despite a 50% fall in sales from 2008 to 2010, says Hartmann.
"The mobile crane market is also recovering, but the recovery there is slower than in the tower crane market. Our Grove customers are being more cautious in their investments, but we are optimistic for the coming months and years," comments Kroeppel.
In forecast for 2011 Schramm comments that "a little improvement compared to last year is not unrealistic. Industry is expanding in Germany so there is work for cranes and utilisation in 2010 turned out to be better."
Axle loading is Germany is becoming more of an issue, due more to weak bridges than carriageway damage. Coupled with fuel consumption and maintenance costs putting pressure on margins from low rental rates, this means heightened interest in truck mounted cranes. Tadano reports an increase in planning and order backlog for its HK40 truck mounted crane. It runs at 10 tonnes per axle with less restriction or permit requirement than and all terrain.
The tower crane market is particularly cyclical with sudden and extreme rises and falls. At the peak of the market in 2007 close to 1,000 new tower cranes were sold in Germany. Since then sales declined to a low of around 300 units in 2009 but had already climbed again in 2010 to more than 400 units.
This upward trend in towers is widely forecast by the manufacturers to continue for 2011 and beyond. "We started to see some recovery in the tower crane market in 2010 and that has continued in 2011. We are seeing good demand for our Potain self-erecting cranes and a smaller recovery for the top-slewing market. However, it's important to recognize that we are still some way from the market highs of 2008," says Kroeppel at Manitowoc.
"Utilisation is good but rental rates are down," says Donner at Liebherr. For top slewing towers there is some work on big city projects. There was a lot of work for cranes in the 150 to 280 tonne-metre range on privately funded office building projects, technology parks and big shopping malls but this market is saturated.
Donner reports strong growth in the popularity of bottom slewing cranes over top slewers among end users and rental companies. "Since last year fast erecting cranes in 60 tonne-metre class have been selling more and more." Many factors are driving what is an unexpected shift from top slewing cranes leading the sector. In Germany bottom slewing tower cranes are used instead of truck cranes to move formwork and much of the construction activity is single unit dwellings or their renovation.
Pressure on cost and time is increasing on job sites so lower equipment cost, and shorter erection, disassembly and transport time, are all important considerations. "The 81K fast erector is moving into a range of lifting works done in the past using small bottom slewing cranes. You can climb in tower sections to increase its height, which makes it even more attractive and you don't need a mobile crane to lift up the whole thing like you do with a top slewing crane to erect it."
Energy costs and environmental concerns are a major driver in the tower and other crane sectors. "Alternative energy generation is coming more into the picture than other places. Nuclear power is an issue. There is a trend towards a decentralised power supply infrastructure rather than having a few big power plants here and there feeding the whole country," Donner says.
Self erecting tower cranes and mobile folding tower cranes are finding good business installing solar panels. For a normal house it is two or three days of work and for a factory is up to two weeks. Another busy area for self erectors is renovation and upgrade work installing thermal insulation, air conditioning and water runoff management like grass roofs.
In addition to solar panels for energy this also means wind turbines. "Following the disaster in Japan there is a clear green trend. It will bring a lot more wind work and will create sensitivity to whether we are doing things in a clean and proper manner," Schramm says.
The crawler crane market will come back, primarily for wind turbine work, and projects are in the planning phase. "It is a good outlook for maintenance and installation work in wind turbines," Hartmann says. Issues in Japan with nuclear power further improve the prospects for wind energy. And installing, upgrading and maintaining wind turbines occupies more cranes than building and maintaining nuclear power plants.