Europe on its way back

By Sandy Guthrie15 March 2011

Johann Sailer

Johann Sailer

The European construction equipment industry is heading back into growth, although there are less positive signs with non-compliant machinery from the Far East still causing problems, according to Johann Sailer, vice president of CECE (Committee for European Construction Equipment).

Mr Sailer, speaking at the Samoter trade fair in Italy, said that CECE estimated that European manufacturers managed to raise their turnover by around +18% in 2010, compared with "the disastrous year of 2009".

He said, "The increase is unfortunately not compensating the drop since the beginning of the global economic crisis at the end of 2008, but can be seen as one step back to normality."

Mr Sailer said that the industry was nearly back to the levels of 2005. "A number of markets are on their way back to normal business, but overall, Europe is not back to the average of 10 years ago."

CECE's Business Barometer, a monthly survey among industry leaders, showed that the number of optimists in the sector was growing again. Most manufacturers expected further growth of around 11% on average in 2011.

It found that there were large differences in market development within Europe. The big markets - especially Germany at +19%, with earth moving equipment performing better than expected, and the UK at +57%­ - showed upwards trends in 2010. These are expected to continue for the year to come.

Southern European countries did not develop as well as some others. Mr Sailer said, "For Italy, construction equipment turnover stagnated in 2010. In Spain, the situation is still very negative, as figures show a downturn of -19% again in 2010."

He said he regretted that during the worst moments of the crisis, throughout much of Europe, almost all the government economic support schemes focused on the automotive industry, with the exception of some incentives from the Italian government and some scrappage schemes.

"We must try to influence politicians that our industry is very important for countries," he said.

He added that while Spain's manufacturers had only modest expectations and were not expecting growth, France and Scandinavia were optimistic.

The real chances for the sector, however, are outside the EU, said Mr Sailer. He pointed to the Russian market, which collapsed in 2009 and came back with considerable increases in 2010. He said, "Russia reacted dramatically to the financial crisis, and now sees dramatic growth. It will be important because of the size of the country and the number of people there."

He added that Brazilian demand was strong, and the boom in China and India was continuing.

"These demand trends mirror the trends in the construction sector globally with construction activity in Asia and Latin America growing above +5% while in Western Europe, only around +1% is to be expected."

While there were clear signs of improvement in Europe, and a positive balance for the first time in two years, there was thought to be a less positive influence on the markets from the Far East.

"Some of these countries are also the source of a growing European concern. More and more non-compliant or counterfeited equipment is shipped to Europe from the Far East, creating unfair competition in Europe for our industry.

"This is a battle we cannot lose now, and for which governments and authorities should really watch out to protect the European industry. This does not mean protectionism but only ensuring the respect of common rules."

He said that the authorities needed to be trained to understand machines, to be able to spot why they were not compliant. CECE has produced a series of guides to help identify non-compliant machinery.

Mr Sailer is managing director of German mast climber manufacturer Geda. He takes over as president of CECE at its annual congress in October.

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