Equipment sales hit new high

According to the latest report by Economic Forecasting Company Off-Highway Research, European construction equipment sales enjoyed a third consecutive year of robust growth in 2006. The number of machines sold rose +14% from 2005's 164439 units to a record breaking 187353 pieces of equipment. All countries, with the exception of Portugal, saw sales rise last year.

Germany saw the strongest growth of the ‘Big 5' markets, with sales bouncing back +29% from 24582 units in 2005 to 31812 machines last year. According to Off-Highway Research, “Demand for heavy earthmoving equipment was particularly buoyant.”

The Spanish equipment market also grew more than the European average with a +16% rise to 19227 units last year. Growth in France, Italy and the UK was more restrained, but still good, at +7%, +6% and +10% respectively.

The expansion of the UK market means it is now Europe's largest (in volume terms), with 33303 machines sold last year – 18% of the European total. However, the French market is almost the same size at 33278 machines last year, and Italy is close at 30537 units. In total, the Big 5 accounted for 79% of Western European equipment demand last year, with sales of 148157 machines

However, some of the strongest growth in sales came in the smaller European markets. Most impressive of all were Denmark and The Netherlands, which both saw a +34% rise in equipment sales. Austria, Belgium, Ireland, Norway and Switzerland also did well, with sales growth of +22%, +16%, +16%, +19% and +16% – all above the European average.

The only contracting market last year was Portugal, where the volume of machines sold dropped -3%.

By Machine

As with the geographic view, there was growth almost across the board for the various individual types of construction equipment. Most notably, sales of mini excavators grew by more than 10000 units for volume sales of 62740 units last year, a +19% rise on 2005's figure of 52295 machines.

At the heavier end of the spectrum, there was a notable increase in sales of earthmoving equipment, with articulated dump trucks (ADTs) seeing a +27% rise to 2515 machines, while crawler excavator sales were up +17% to 29662 units and the wheeled loader market grew +17% to 22594 machines.

The only major downturn was seen for rigid dumptrucks, with sales falling -16% to 517 units. There was also a slight decline in rough terrain masted forklift truck sales, but this was more than made up for by strong growth for telescopic handlers.

Off-Highway Research points to a number of factors for the healthy state of the Equipment market. These include the growth in equipment rental across Europe, leading to fleet expansion and faster renewal times, low inflation and interest rates, a strong European market for infrastructure and generally good business confidence throughout the region.

Indeed, the company says demand for equipment is still outstripping supply, with insufficient manufacturing capacity leading to long delivery times. “In 2006 there is evidence to suggest that the market could have been +5% to +10% higher if only dealers' orders could be fulfilled by the manufacturers,” it said.

European Outlook

Despite demand still running ahead of supply Off-Highway Research expects a -1% decline in the European equipment market this year to 185830 units, with the cycle forecast to bottom-out in 2010. However, the company says equipment sales should remain at historically high levels throughout this downturn, averaging around 170000 machines per year. This compares to a 10-year average of 144751 units from 1997 to 2006.

Global View

Last year was also a strong 12 months for the global construction industry, with sales in the major markets of China, Europe, Japan and the US hitting 664525 units – a +8% rise on 2005. Although the North American market fell -5% last year compared to 2005, growth in Europe, Japan and especially China more than offset this decline.

For more information, visit: www.offhighway.co.uk