The index for the global agricultural machinery business dropped back to the low level of October 2014. Although the global downturn may have come to a halt, a global recovery is not in sight for the next six months, even if future expectations improved and are now slightly in the positive.
Apart from Russia, the general mood of farmers remains largely negative due to the low commodity prices and thus profitability. This is unlikely to change in the short-term.
Compared with the last two surveys in 2015, the future expectations are far more cautious – particularly the expectations from companies located in Western Europe. This, as well as the further deterioration of the business of the U.S. industry, are two major reasons for the decline of the global business climate.
Regarding the global industry's expectations for the individual markets in the next six month:
- East Asia is leading the ranking, followed by Africa.
- For North and Latin America, a majority of the survey participants expect turnover decreases.
- A large majority of Japanese and Russian industry representatives, but also one third of the Turkish participants, report about changes in government programs with positive effects on demand for agricultural machinery in their countries. This could be one explanation, why contrary to other locations, the volume of orders did not decrease in Russia, Japan and Turkey.
The industry's evaluation of the impact from energy production to its end customer is worst in the U.S. Europe leads the negative ranking concerning the impact from crop and animal production. On the other side, Russian participants report high credit loan restraints.