VDMA Construction Equipment and Building Material Machinery

• Turnover forecast 2008 of plus 8 per cent confirmed
• Decline expected for 2009

Due to the solid order backlog the companies of the German construction equipment and building material machinery industry currently have, VDMA, the German Engineering Federation confirms the turnover forecast of an increase by eight per cent which the Association had predicted at the beginning of this year.

“This equals a volume of 16.5 billion Euros”, said Mr Dr Peter Hug, expert on economic matters at a board meeting of his association in Haigerloch recently.

Construction equipment on the decrease, building material machinery on the high

Although the value of incoming orders regarding construction equipment saw a decline of 23 per cent in the first half of 2008 and with this experienced a significant decline, revenues deriving from orders already placed last year offset the low and make for a 14 per cent high. The situation is completely different as regards the area of building material, ceramics and glass machinery. Incoming orders saw a net increase of 20 per cent and turnover of 15 per cent during the first six months of the year.

Domestic demand ailing

In the domestic market, it is the serial production business which has lost speed particularly. Sales of used machinery to countries in the East are not happening in quite as large quantities as in previous years any more, explained Mr Hug. Cost for energy and raw material lead to shrinking margins. The strong Euro puts additional competitive pressure on the companies.

Eastern Europe and Asia stimulating exportation

The export business is different in each area of the industry. With regard to construction equipment, foreign orders saw a net decrease by 19 per cent due to a slump on the US as well as on the UK and Spanish markets. Building material machinery, on the other hand, experienced a net increase in foreign orders of 22 per cent. This industry profits from the high demand in Eastern Europe and Asia. In these regions, the propensity to invest in construction and mining companies is developping positively. The industry’s association therefore expects good sales also medium-term. The building material area also saw growth in the Middle East and Latin American markets.

Decline expected for 2009

VDMA forecasts that all the orders on the books will be nearly fulfilled in 2009. This will lead to a significant decline in turnover in the construction equipment business. Mr Hug expects a decrease in turnover on construction equipment “made in Germany” by nearly eight per cent and an increase in turnover on building material, ceramics and glass machinery by nearly 10 per cent. This would lead to a turnover for the entire industry of about 15 billion Euros.