“Never before have we seen such a drastic decrease in incoming orders happening at so many companies, in so many different sectors and markets at the same time as in the last quarter of 2008,” said Dr Christof Kemmann, chairman of the Construction Equipment and Building Material Machinery Association, which is part of the German engineering federation VDMA.
Figures from the association show the level of incoming orders for German construction equipment and building material machinery companies dropped by more than 30% between October and December 2008, with the difficulty in securing funding in the present global economic climate and volume of projects being postponed affecting construction equipment manufacturers the most. This has also impacted the 2009 forecast for manufacturers of construction equipment machinery as they already have lower order books and, as such, the association expects the continuing slump to have a severe impact on the industry.
Conversely, the association says the industry remains content with the development of sales in 2008. German manufacturers of construction equipment, building material, glass and ceramics machinery saw a growth in turnover of 7% to EUR16.4bn in 2008. Construction equipment machinery made EUR11.1bn of this amount, whereas building material, ceramics and glass machinery made EUR5.3bn. This means that the turnover in construction equipment machinery remained the same, whereas building material, glass and ceramics machinery yet again saw a significant growth to their sales compared to 2007. This increase was mainly in their export sales.
Construction equipment manufacturers are anticipating a positive impact from stimulus packages announced by the German government, especially additional funds made available in 2009 for public investments in infrastructure projects as well as measures aiming at accelerating the allocation of construction work and permits.
The association added the German construction equipment and building material machinery industry still has a very good competitive position internationally, with opportunities for growth regionally as well as technologically. “The demand of construction work worldwide keeps on being high, for instance with regard to infrastructure projects,” it said. “Companies are convinced that their clients will start ordering again as soon as the current situation of retention is over and confidence in investors and banks is re-established. As the construction industry tends to be an earlier starter within the economic cycle, the construction equipment and building material machinery industry is likely to profit from these trends as one of the first industries.”
