2011 saw continued economic recovery in almost all sub-sectors of the German construction equipment and building material machinery industry, and, for this year, the German Engineering Federation therefore anticipates 5% turnover growth.
Turnover for Germany’s construction equipment and building material machinery industry rose by 17% in 2011 to EUR 12.6 billion. Of this, EUR 7.8 billion was accounted for by the construction machinery sector and EUR 4.8 billion by the building materials, glass and ceramics machinery sector.
2011 saw continued economic recovery in almost all sub-sectors, though not all at the same speed. Overall, demand for construction machinery worldwide was higher than for building material machinery throughout the entire year. “In 2011 our customers simply invested more again,” said Johann Sailer, Chairman of the German Engineering Federation’s Association for Construction Equipment and Building Material Machinery (VDMA Bau- und Baustoffmaschinen), explaining the positive growth in the sector. Previously reticent investments as a continuing result of the crisis were now being made up for, especially by plant hire firms. This trend is also set to continue in 2012.
Germany’s construction machinery market is in good shape and contributed significantly to the good sectoral result. For instance, manufacturers of earthmoving machinery sold more than 30,000 units for the first time since 2007. This means the market doubled in just two years. Sales of a good 11,000 wheel-loaders mean it was possible to reach levels last achieved in 1995. Overall, in 2011 the German construction equipment and building material machinery industry sold goods domestically worth EUR 3.3 billion – with EUR 2.45 billion of this accounted for by construction machinery. This is 19% more than last year.
Orders for machinery last year, however, also came from abroad. Once again, the key sales markets for German construction equipment and building material machinery were France, Russia, the US and the world’s largest market China. Compared to the previous year construction machinery exports rose by about 24% in total. The Russian market, in particular, saw a great boom. Companies were able to sell twice as much as in the previous year. Exports of building material machinery in the same period made less of an impact but still attained a good 8% over the previous year. Seeing remarkable development was Poland (+41%) as well as Turkey (+110%) at a lower absolute level. Overall, in 2011 the sector exported construction equipment and building material machinery worth EUR 9.3 billion. This is 17% more than in 2010.
Given that BRIC countries are still intact as the drivers of growth, the sector anticipates that demand for construction equipment and building material machinery will develop positively in the medium term. This trend is also being felt in terms of order levels. In 2012, however, the German domestic market is likely to see less growth than the previous year. For this year, the German Engineering Federation therefore anticipates 5% turnover growth each in the two sub-sectors. This means, for the first time since the crisis, we can achieve a good sectoral level, says Sailer.
A major challenge facing the sector are today’s ever shorter economic cycles with greater volatility and short delivery times. To be able to react to this more quickly, companies are doing all they can to be more flexible – both in terms of production and organization. This costs money and means enormous expense.
At the same time, the industry is feeling the extraordinarily heavy burden on costs due to ever more regulations. Construction machinery manufacturers still have a long way to go to recover from the switchover to the EU’s new Stage IIIB Emissions Standards. To adhere to the EU regulations in some cases they have had to develop and produce entirely new machines. These machines are not marketable on the growth markets due to price and available fuel quality. “However, with our creativity and innovative power we will manage to overcome these extraordinary cost burdens,” concluded Sailer.