German-built equipment sales peak

German construction equipment and building material machinery manufacturers will see a +8% rise in sales revenues this year according to the German Engineering Federation (VDMA). However, the association expects a decline in 2009 from this peak of € 16,5 billion due to falling orders for construction equipment.

According to the VDMA, there was a -23% decline in incoming orders for construction equipment in the first half of 2008. A high backlog of orders from last year means the full effects of this downturn are yet to be felt. In fact revenues in the construction equipment segment were up +14% in the first half of the year.

The picture for orders is completely different in the building materials machinery segment, with a +20% rise in the first half of the year. This drove turnover in the sector up +15%.

According to the VDMA there are several factors influencing the anticipated slowdown in the construction equipment segment. Close to home, sales of used equipment to Central and Eastern Europe are slowing, which in turn affects the rate at which these machines are replaced in German fleets.

Export markets are being hit by the high value of the Euro, combined with slowdowns in major markets such as Spain, the UK and US. As a result, foreign orders for German equipment fell -19% in the first half of the year.

This all means that 2008 is expected to be a peak in the German equipment industry, with a decline forecast for 2009. The VDMA expects a -10% fall in turnover in 2009 to about € 15 billion.