“Compared to other markets in Europe, Russia is doing fairly well for the European construction equipment industry,” says Ralf Wezel, Secretary General of the Committee of the European Construction Equipment Association (CECE) at CTT, the major construction equipment trade show in Russia taking place from June 4 to 7 in Moscow.
One out of three tower cranes produced and sold in Europe are currently going to Russia. Governmental and private projects in the oil and gas industry and in the infrastructure and housing sectors stimulate demand. Building hoists, truck mixers, concrete batching plants, mixing systems and concrete pumps are currently also most sought after. However, sales of road equipment have decreased considerably in the first quarter of this year. “Despite this, Russia remains to be one of the growth engines for our industry,” states Wezel.
The situation in Europe has not changed much in the first quarter of 2013. While Southern Europe is waiting to see some light at the end of the tunnel, Western and Northern Europe are remaining better off. According to recent CECE figures, sales of earthmoving and road equipment dropped by 20 and 30% compared to the same period the year before and the bottom is not yet hit in some Southern European countries. Back in 2007 the combined market share of Portugal, Spain, Italy and Greece accounted for almost 25% of European sales, in 2013 this number only amounts to a mere 3.5%. Building construction equipment remains the only sub-sector where slight growth is observable at the moment, though this growth only comes from some regions like Russia, Scandinavia, Turkey or Germany.
The industry expects the situation to improve significantly in the second quarter of this year, as the longwinter had delayed construction activity and investments. Companies also reported a very good order intake at and after bauma 2013. The recent CECE business barometer confirms this positive trend. Increased confidence of European companies about future sales pushed the business climate index of May over the zero line. However, even under an optimistic scenario with good growth in the next quarters, it will be difficult to compensate the early deteriorations over the year, particularly for earthmoving and road equipment.
In 2012 the European construction equipment industry increased their turnover by 3.4% reaching a volume of 25 bn Euro. For 2013 it is expected that the overall sales will stay on the level of 2012. European manufacturers are expecting to compensate the drop in European demand by increased sales outside Europe where most markets are supposed to show an upward trend.
CECE and AEB advocate equal treatment of all manufacturers
The European construction equipment industry pledges for a fair competitive environment of the industry and open markets. Only under these conditions, the best technology can be taken to the countries to improve infrastructure, living and working conditions, to save costs and to lower bad impacts on the environment. At the moment in Russia non-Russian companies are currently suffering from the disposal fee that the Russian government has imposed in September 2012, which are payable for each wheeled vehicle imported to Russia or manufactured in Russia. Although CECE supports the approach of the Russian government to ensure ecological safety in the Russian Federation subject to balanced and economically justified rates, however CECE, via the national Russian member association AEB, also advocates equal treatment towards all manufacturers. In addition, CECE identifies the need for revision of the Government Resolution taking into consideration specificity of the construction equipment manufacturing, recycling processes, and economic effect of the disposal fee rates for this machinery on the Russian economy. For this reason CECE and AEB are currently working with the Ministry of Trade and Industry on amending the legislation and developing a more balanced one. Andrey Komov, Chairman of the AEB Construction Equipment Committee, comments, “We hope that the Russian Government takes into consideration the AEB recommendations and corrects shortcomings of the resolution on recycling fee with respect to the construction equipment industry.”