In the first half of 2014, construction equipment sales on the European market grew by 10.2% compared to the same period in 2013. According to recent figures released by the Committee of European Construction
Equipment (CECE), demand was strong in the first quarter of this year. The business climate, however, decreased markedly after summer.
Demand is notably rising in Spain, Portugal and Italy
For the first time after the long dry spell, construction equipment sales in the Southern European countries like Italy, Spain and Portugal have improved notably, signalling that the European construction sector is now stabilizing after having hit the bottom – with positive effects on the construction equipment market. However, market demand might cool down further in the second half of the year, particularly in countries like Germany, France and the UK. “Looking at 2014 as a whole, robust growth figures across product groups and countries still seem realistic,” said Eric Lepine, President of CECE and Managing Director of Caterpillar France, at a press conference on the occasion of the CECE Congress in Antwerp.
The UK is best performing construction equipment market in Europe
The star performer among the European markets continues to be the UK. Here, earthmoving equipment sales grew by 44% in the first half of this year compared to the same period a year before. The other Northern and Western European countries all recorded a robust growth as well, while the Central and Eastern European countries have been developing unevenly. The Russian market has continued its heavy downturn due to the political situation, but also because of a cyclical downturn in the construction equipment industry. In addition, players from Asia increasingly expand their business. Turkey, once a promising market for the industry, is not recovering. It saw double-digit declines for the fourth consecutive quarter.
Growing orders from non-European countries
However, the majority of European construction equipment manufacturers report growing incoming orders, particularly from non-European countries. Especially the Middle East is the area of growth with Saudi-Arabia being the growth engine in the region. The North American markets are developing rather well while no signs of improvement can be reported from Latin America.
Asia shows mixed signs. The increasingly positive mood in the Indian industry after the elections this spring does not accelerate construction equipment demand. A change is not expected before next year. China is currently facing another troubled year. After the first quarter had given rise to cautious optimism, this has changed back to a negative evaluation. China will probably see the third consecutive year of double-digit declines. Southeast Asian countries including Indonesia are performing much better. The second quarter has also brought about the turnaround for Australia which is now on a growth path despite the weakness of the mining industry.
Road and earthmoving equipment well in demand
In terms of product groups, road equipment was the best performing construction equipment sub-sector. CECE is expecting a double-digit growth for 2014. Earthmoving equipment is also doing rather good. In the first half of 2014, sales recorded a growth of 9.6% on a year-over-year basis. “This is positive, however, we have to bear in mind that this is a good 43% below the peak we had in 2007,” stated Lepine. Concrete equipment is still weaker than the other sub-sectors and shows a flat development up to now whereas tower cranes recorded an 8% plus in sales in the first six months. In this segment there is no boom in sight but a stable development can be expected, all the more so since export out of Europe picked up by 10% this year.
Positive outlook maintained
The post-summer CECE surveys show the overall business climate going markedly down, but also confirm a positive trend in the construction industry in general for the second half of 2014. The balance of incoming orders is still stable. “In all, CECE maintains its growth estimate of up to 10% for the European construction equipment industry over the year,” concluded Lepine.