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Ups and downs for the construction industry

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World Cement,

German construction equipment manufacturers are getting more optimistic about the future than they were towards the start of 2015, however, building material facility manufacturers are more sceptical.

Johann Sailer, Chairman of the VDMA Association for Construction Equipment and Building Material Machines highlighted: "uncertainty is the largest obstacle for us at present.” However, the VDMAs member companies have experienced double-digit growth in turnover in the first five months. Construction equipment manufacturers are, therefore, correcting their forecast upwards for 2015 – increasing turnover by 4%, to €8.7 billion, which seems achievable.

On the other hand, building material facility manufacturers are more sceptical as, whilst generally on schedule, large-scale orders are rare and fiercely competitive.

"We therefore expect only to break even in 2015," explains Sailer. This is equivalent to turnover of €4.3 billion and would see turnover reach around €13 billion for the entire construction equipment and building material machines industry in 2015.

Demand for construction equipment grows in Europe and North America

Despite the fact that the Russian market is in free fall and France is experience a downturn, in the first five months of 2015, construction equipment sales in Europe and North America have grown significantly.

Sales are primarily coming from the UK, Scandinavia and Germany. Moreover, manufacturers are also expecting new momentum from Poland. Nonetheless, Europe still needs to recover.

The North American construction equipment market is doing well and has already reached the pre-crisis level of 2006 and steady growth is coming from Saudi Arabia and the Emirates.

China, India, Southeast Asia and Latin America are falling short of expectations. Whilst demand for earthmoving machinery is low – for example, heavy machinery in particular currently has few customers due to the global mining crisis – the trend is continuing upwards in concrete technology.

Building material facilities are currently less successful

Orders for building material facilities are becoming gloomy for many reasons. Companies are feeling the effects of orders from the Russian market that have fallen through. Furthermore, the merger of two cement production companies, Lafarge and Holcim, has also thrown the industry into turmoil and caused an investment backlog. Similarly, the markets in Southern Europe and South America are causing difficulties for the industry.

Whilst many project are planned, fewer and fewer of them are actually implemented meaning that the playing field is reducing. At the end of the year, building material facility manufacturers are predicted to merely break even.

Adapted from press release by Joseph Green

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