VDMA sees +5% growth for German manufacturers

Sales of German manufacturers’ of construction equipment and building material machinery are expected to grow +5% this year, according to the industry’s trade association, Verband Deutscher Maschinen- und Anlagenbau (VDMA) Last year the industry’s sales came to € 11.3 billion.

According to VDMA economist Sebastian Popp, construction equipment sales are growing in most parts of the world this year but the building materials machinery sector is relying more on orders won in 2013 which are now being fulfilled.

German manufacturers have seen incoming orders for construction equipment increase +9% this year. However, orders for building material machinery are down -30% compared to a year ago. Mr Popp said this was partly a one-off effect with a number of big orders skewing results to an unnatural high in 2013.

In terms of sales, the first five months of 2014 saw German manufacturers sell some +14% more construction equipment than in the same period last year. However, the VDMA said this growth is likely to slow down and is expected to come in at +5% for the full year. It added that the European construction equipment market is expected to grow in 2014 for the first time in several years, with the UK showing the most significant growth.

However, the association added that there a steep decline was being seen by German manufacturers in Russia, which is attributed to the political situation, a cyclical decline and the weakness of the Rouble.

The VDMA said there would also be a decline in China this year, following the stimulus-driven high seen in 2011. It said the total downturn since that high has been more than -40% and Mr Popp added, “This year, it will probably go down even further.”

The main reasons for this are said to be “enormous” excess capacities and young machine fleets in the market, as well as difficulties with financing projects and machinery.