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Germany’s cement and construction equipment industries face a challenging year

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World Cement,

The German Engineering Association reported that machinery and tool orders were down 6% in December 2013. Domestic business fell by 10% and international business by 4% against the previous year. Across October – December 2013, incoming orders fell 3% y/y, while for the full year growth averaged -2%.

“December saw flagging growth at home and in the neighbouring eurozone countries. Principally, monthly results should not be overstated but we would have preferred a better end for an already difficult year,” said VDMA Chief Economist Dr Ralph Wiechers. “All hopes now rest on 2014.”

The German cement industry likewise faces uncertainty with the announcement last year of the Renewable Energies Act surcharge, which could push up power prices for energy-intensive industries. The German cement works association, the VDZ, reported in December that rising costs could put an end to the German cement industry, which is already competing with foreign countries for market share. ‘Due to rising production costs, particularly facilities located close to border or coastal areas of European neighbouring countries would be affected, as the latter are not subjected to any comparable national additional surcharge’, the association said in its report on 19 December. VDZ commissioned a report into the impact of the surcharge, which indicated that more than 20 000 jobs would be lost if these cement plants were to close. The full report can be downloaded here.

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