Europe at five-year high

17 March 2017

The European construction equipment sector is at its highest level in five years, according the annual economic report from CECE (the Committee for European Construction Equipment), although it pointed out that the market was still considerably below the record levels experienced before the economic crisis.

Growth of 10% in the European construction equipment sector was seen in 2016, and CECE found that building construction equipment experienced better demand than civil engineering equipment.

It said that as in the previous year, the European market outperformed most regions of the world, and ranked third in growth numbers, behind only China and India.

Sebastian Popp, economic expert at CECE, said, “The double-digit sales growth in 2016 sure was positive news for our industry in Europe, but we still see big disparities across the continent.”

In terms of volume, the strongest sales increases were recorded in France, Germany and Italy.

“The German market in particular, and Northern and Western Europe in general, are close to their historical record levels,” said Popp. “On the other hand, recovery of Southern Europe, and Central and Eastern European countries still falls short of expectations.”

CECE felt that the revival of the Russian market after years of extreme deterioration was positive.

Earthmoving equipment

Sales of earthmoving equipment in Europe grew by 12% in 2016. Building construction equipment (tower cranes and concrete machinery) recorded an even higher growth of 21%.

“It is encouraging to see that all construction machinery sub-sectors benefited from the upturn”, said Popp. “This corresponds to the situation of our customer industry which sees growth both in residential and non-residential construction as well as civil engineering.”

The CECE Business Barometer index had hit a temporary low following the Brexit vote (the UK’s decision to leave the European Union) in the summer of 2016, but has been on a growth path since then which resulted in the highest index value in almost six years in February 2017.

CECE said that interestingly, almost all world regions were seen as positive by the manufacturers surveyed in 2017.

Fuelled by infrastructure investments pushed forward by the new government, the US market was expected to see an upturn.

China and India were expected to continue their upward trend seen last year.

A majority of European manufacturers expect the Middle East markets to recover in 2017.

Latin America, on the other hand, is not yet expected to bounce back from the low 2016 level, CECE said.

Positive scenario

For the European market, the manufacturers surveyed in the CECE Barometer expected a generally positive scenario, except for the Turkish market. Hopes were said to concentrate particularly on Scandinavia, France, and Germany.

Optimism is equally strong across sub-sectors. The share of manufacturers expecting an improvement of the business situation was said to be approximately two thirds, and CECE said this was true for earthmoving, road, and concrete equipment producers.

Only component suppliers did not trust the upswing in a similar way – amid a positive average assessment, 63% of them expected unchanged business in the near future.

Against the backdrop of a modestly growing European construction sector, generally positive industry sentiments, and different stages of market recovery across countries, stable sales of construction equipment with a slight upward tendency appear to be the most realistic scenario for Europe in 2017, said CECE. Also, it added, European manufacturers should be able to benefit from a world market which is expected to return to growth after three consecutive years of decline.

CECE’s annual economic report contains sections on the macro economic situation, the performance of the construction sector, the main markets and main segments of the European construction equipment industry.

The report this year also includes information from the national CECE member associations, shedding more light on regional developments in the European construction equipment sector.

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