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VDMA sees opportunities elsewhere as construction machinery market remains flat in Europe

World Cement,

VDMA, the specialist association for construction equipment and building material machinery, has issued a press release that indicates the industry is holding its ground, but is unlikely to make marked improvements in 2013.

A slow year, but not a bad one

The German construction equipment and building material machinery industry generated a turnover of €12.5 billion in 2012, of which construction equipment accounted for €7.9 billion and the remainder was generated by the building material, glass and ceramics industry. This represents a decrease of approximately 1% y/y, which the association takes as a sign of stagnation in the market. “Although, on the whole, times are difficult,” says Mr Johann Sailer, chairman of the association, “last year was a good year for our industry.” He adds that 2013 will not see any peaks, with demand unlikely to grow until the second half of the year.

Demand from emerging markets

Demand in China has a knock-on effect for construction machinery manufacturers around the world. While demand for construction machinery in Germany fell by 30% in 2012, Europe is a small market in the grand scheme of things. Off-Highway Research estimates that mobile construction machinery worth US$100 billion was sold worldwide in 2012. Almost 30% of this business was in China, nearly 22% in North America and only 12% in Europe. Currently, the VDMA reports, China is facing financing problems and surplus capacities, but it is thought this will be sorted out in the next 18 months and China will remain the lead market for construction machinery.

Elsewhere, Southern Europe’s extended down period continues while Northern Europe is more stable. Mr Sailer predicts that new business will likely come from less traditional markets, such as Indonesia, Myanmar, Southern Africa and Mongolia. This year’s bauma fair is partnered with Indonesia, a market with a lot of potential. “We would like to try and convince Indonesian decision-makers to invest into the right technology and modern standards”, Mr. Sailer explains. bauma offers investors the opportunity of a comprehensive and full overview of the current state of technology where they can see for themselves the kind of construction equipment, building material and mining machinery that is on offer.

*VDMA Specialist Association for Construction Equipment and Building Material Machinery - the Association for Construction Equipment and Building Material Machinery (Fachverband Bau- und Baustoffmaschinen) is a sectoral association within the German Engineering Federation (VDMA), which with its 3000 members is the largest industrial federation in Europe. The association represents the interests of some 300 companies that manufacture machinery and facilities for the construction, building material, natural stone, ceramics and glass industries.

Adapted from press release by Katherine Guenioui.

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