Positive 2011 for German equipment
By Sandy Guthrie10 February 2012
Turnover in the German construction equipment and building material machinery industry rose by 17% in 2011 to €12.6 billion, of which €7.8 billion was accounted for by the construction machinery sector and €4.8 billion by the building materials, glass and ceramics machinery sector.
Johann Sailer, chairman of the German Engineering Federation's Association for Construction Equipment & Building Material Machinery (VDMA Bau- und Baustoffmaschinen), said, "In 2011 our customers simply invested more again."
He added that previously reticent investments as a continuing result of the crisis were now being made up for, especially by plant hire firms, with this trend set to continue in 2012.
Figures from the Association suggest that 2011 saw continued economic recovery in almost all sub-sectors, though not all at the same speed. Overall, demand for construction machinery worldwide was higher than for building material machinery throughout the entire year.
Germany's construction machinery market is in good shape and contributed significantly to the good results, said the Association. For instance, manufacturers of earthmoving machinery sold more than 30,000 units for the first time since 2007, meaning the market has doubled in just two years.
Sales of 11,000 wheeled loaders led to levels last achieved in 1995. Overall, in 2011 the German construction equipment and building material machinery industry sold goods domestically worth €3.3 billion, with €2.45 billion of this accounted for by construction machinery - a rise of 19% on last year.
Once again, the key export sales markets for German construction equipment and building material machinery were France, Russia, the US and the world's largest market, China.
Compared to the previous year, construction machinery exports rose by about 24% in total. The Russian market, in particular, saw a boom and companies sold twice as much year-on-year.
Exports of building material machinery in the same period made less of an impact but still achieved a rise of 8% over the previous year. The VDMA said remarkable progress had been seen in Poland (+41%) and Turkey (+110%).
Overall, the sector exported construction equipment and building material machinery worth €9.3 billion in 2011 - 17% more than in 2010.
The Association said that given that BRIC (Brazil, Russia, India and China) countries were still drivers of growth, the sector expected that demand for construction equipment and building material machinery would develop positively in the medium term.
This trend is also being felt in terms of order levels, it said. This year, however, the German domestic market is likely to see less growth than 2011. For 2012, the VDMA, therefore, expects 5% turnover growth each in the construction equipment and building material machinery industry sub-sectors.
The German Construction Industry Federation recently predicted a market slowdown for 2012.
The VDMA added that a major challenge facing the sector is today's ever shorter economic cycles with greater volatility and short delivery times. It said that to be able to react to this more quickly, companies were doing all they could to be more flexible - both in terms of production and organisation. This, it said, meant enormous expense.
At the same time, the industry is feeling the extraordinarily heavy burden on costs as a result of increasing regulations.
The Association said that construction machinery manufacturers still had a long way to go to recover from the switch over to the EU's Stage IIIB Emissions standards. In some cases, to adhere to the EU regulations, manufacturers have had to develop and produce entirely new machines. These machines cannot be sold in the growth markets because of price and the quality of fuel available.
Mr Sailer was positive about the situation, though, saying, "With our creativity and innovative power, we will manage to overcome these extraordinary cost burdens."