Construction equipment industry calls for improved efforts to boost production in Europe

During the CECE Congress 2014, members of the European equipment industry called on EU policy makers to focus their efforts on creating policies which will promote the growth of industrial production in Europe.

Committee for European Construction Equipment (CECE)

The European construction equipment industry has called for a concerted effort to boost industrial production in Europe. 

  • In a fast and ever changing environment, construction equipment companies need to be flexible and agile to cope with unpredictable markets, a demanding regulatory environment, and the need to deliver the latest technology.
  • At a press conference on October 17, Eric Lepine, President of the Committee of European Construction Equipment (CECE), called on EU policy makers to play their part, too, in ensuring a strong, competitive industrial production in Europe.
  • The press conference took place at the CECE Congress 2014, on October 16 and 17 October in Antwerp.
  • Motto of the 2014 Congress was ‘Construction equipment industry in an agile world.’

EU must lift industrial share of GDP

“A strong industrial manufacturing base is important for economic resilience and growth,” said Lepine, the CECE President and Managing Director of Caterpillar France. As part of the ‘2020 strategy for smart, sustainable and inclusive growth’, the EU had vowed to lift the share of industry in Europe’s GDP to 20% by 2020. However, the ratio of industrial production is developing negative rather than positive, from 16% in 2011 to 15.1% in 2013. “We fear that this issue will be down played,” warned Lepine. “To win in Europe, we will need a concerted effort by business, policy makers and other stakeholders in society.”

Lepine underlined that the construction equipment industry is willing to play an active part in reaching the goals set by the EU. But EU policy makers must set the right framework conditions, providing business with planning certainty, coherent policies, access to finance, room for innovation and facilitating the access to foreign markets. “We urge the European Commission to confirm and even upgrade the industrial production target in the coming months and the EU governments to then endorse this in their economic spring summit in 2015,” said Lepine.

Investment in infrastructure in Europe will be necessary too. CECE welcomes the announcement from the new Commission President, Jean-Claude Juncker, about a forthcoming investment package of 300 billion EUR, of which details are expected to be communicated soon.

The sector’s specific priorities

Through CECE, the sector has further identified a number of specific priorities for the industry to follow-up closely in Brussels. Among these are: the upcoming emissions regulation, external trade and access to foreign markets, and market surveillance.

Exhaust emissions regulation: sufficient lead-time and global alignment needed

The European Commission published its proposal for a revision of the directive 97/68/EC last month, covering exhaust emissions reduction for engines installed in non-road mobile machinery, setting standards for construction equipment and other machinery that are the strictest in the world. The key elements of the regulation for the sector are the introductory dates of 2019 to 2020, limit values that will reduce emissions to extremely low levels, and an unprecedented rate of introduction across the entire power range of equipment, irrespective of combustion cycle and fuel. European construction equipment manufacturers already produce the cleanest and safest machinery in the world. However, delivering the next generation of all machines to the market in time will remain a complex challenge. Product cycles are long and product diversity is huge, putting a tremendous strain on development time. The sector will work with the EU institutions to obtain further refinements in the proposal, and secure swift adoption in order to preserve elementary lead-time ahead of entry-into-force.

Construction equipment industry will benefit from TTIP

"We are happy that the machinery industry has now been included in the TTIP negotiations currently underway between the U.S. and the European Union,” stated Lepine. The construction equipment industry will benefit in particular when it comes to regulatory convergence and harmonization of technical and environmental requirements applying to machines, to public procurement liberalization and to third countries market access for re-manufactured products. If successfully negotiated, business would be made easier and costs reduced for manufacturers acting on a global scale and for customers alike. There would no longer be the need to provide additional certificates, testing procedures and documentation. Change of machinery components and constructive adaptions of the machines could be done more easily. According to calculations
made by one CECE member company, costs of a machine for the U.S. market today are more than 17% higher than those for the same machinery type operating in Europe. 

Better market surveillance system is a key factor to achieve EU growth agenda 

The presence of non-compliant machines on the market and thus of unfair competition has been a concern for the sector for a long time. Some companies spend 70% of their R&D to comply with EU directives on environment, safety and other technical requirements of European legislation. “The legislation must therefore be properly enforced and policed,” said Lepine. According to a CECE survey, one out of three companies faced losses in sales because customers opted for a noncompliant machine. In February 2013, the European Commission issued a legislative proposal which was amended by the European Parliament. But since then, the package is blocked in the EU Council and no change is expected before March 2015. “This is a situation we regret, especially because only such slow progress is made here,” commented Lepine. CECE will call on the new European Commission to include the issue in their new agenda for jobs and growth. The well functioning and protection of the internal market is key for achieving the EU growth agenda. “Furthermore, restoring the level playing field in the Single Market through an improved market surveillance system will enable a shift from price competition to a competition on quality, reliability and efficiency,” said Lepine.