German construction equipment sales boom 01 Mar 2018

The German construction equipment manufacturing industry is thought to be in the middle of a boom and further growth is predicted for 2018 after a turnover of €10.8 billion for 2017, a better than predicted increase of 15% compared to the previous year. An 8% increase in turnover is predicted for 2018 with hopes for continued rise in sales into 2019.Matching this and according to the Ifo-Konjunturtest, the capacity utilization of the German construction machinery manufacturers and building material plants was at 89% in early 2018.

Increasing turnover of German manufacturers

Speaking at the annual VDMA meeting in Frankfurt, Franz-Josef Paus, Chairman of the Construction Equipment and Plant Engineering Association of VDMA and Managing Partner of Hermann Paus added: “We are benefiting from simultaneous high demand around the world, with no signs that this will change. Given this, German manufacturers are looking forward to bauma 2019, the world’s leading trade fair that will take place in Munich in March 2019.”

Sales from German suppliers to Northern and Western Europe were up by 20% to reach record levels, and demand in Southern and Central Europe rose considerably. Russia continues to cause concern as manufacturers find it difficult to rebuild the trust lost through the EU sanctions against Russia over its military activities towards the Crimea, which is recognised by the international community as part of Ukraine.

There was a recovery of sales to North America during 2017 to near the record figures achieved in 2006 and in South America, manufacturers recorded a sales upturn of 26% from Chile, Peru and from a market with much potential in Argentina.

The Near and Middle East was the only region in which the sector once again recorded negative growth, albeit with a considerable improvement during the second half of the year. The Indian market grew for the second year in a row, by 12%, but this growth is still small compared to China, where after five years of sometimes extreme downturns, the Chinese market provided sales in 2017 up by 86%.

Two challenges facing the industry are shortages of materials and staff. Long delivery times from component suppliers are the downside of the high number of orders, and a lack of qualified engineers and technicians, and workers to operate construction machinery is also a problem.

With 40,000 employees in the construction and building material industry, this sector plays an important part in securing industrial jobs in Germany, but there is no room for complacency as the market can turn at any point.