German construction machinery industry demands stable framework conditions in Europe

At the VDMA Construction Machinery group conference held in Frankfurt, the mood was very clear: Construction machinery manufacturers are concerned about a no-deal Brexit and the beginning of a possible disintegration of the European Union. According to the experts, however, the global economic challenges can only be mastered with a strong, united Europe.

The specialized group meets annually to discuss operational topics and projects for the current year. From an economic point of view, the industry as a whole is scaling new heights, with sales rising by 12% in 2018. For manufacturers in Germany, the figure is 12.1 billion euros, of which 4 billion euros is attributable to Germany and 8.1 billion euros to sales from abroad. Sales on the German market grew by 9% compared to the previous year and are even 8% up on the previous record set in 2007. Most markets in Northern and Western Europe are at a similarly high level, while Southern and Central Eastern Europe continued their recovery in 2018 and are maintaining their growth, albeit at a naturally lower volume.

Growth should continue until the industry highlight bauma, which takes place from April 8 to 14, after which experts expect a slight downturn. Although a moderate decline is anticipated, the German market will remain very strong. For Europe, a trend reversal of +/- 0% and possibly even slight declines are realistic. The world market is growing more slowly than in 2018, but growth of up to 10% is possible.

Turnover growth of 3 to 5% expected

The representatives of the construction machinery manufacturers expect industry turnover to grow by a potential 3 to 5% this year in Germany as a production location. “We are at an all-time high, but this time the road that led us here was more stable and sustainable than in 2007. This gives us hope that the industry will be able to maintain this good level for longer,” comments Franz-Josef Paus, Chairman of the Construction Equipment and Building Material Machinery association. He believes that only the lack of qualified personnel on the customer side had a dampening effect and that the construction industry in Germany and Europe remains strong and stable overall.

These positive prospects must not be jeopardized by political chaos. There are challenges to be mastered all over the world. Trade barriers by the Trump government or the well-calculated conquest of world markets by the Chinese require better cooperation in Europe. Prior to the elections to the European Parliament on May 26, European policymakers must also be aware that industry underpins the livelihoods of more than 500 million people and therefore needs support at political level. “Europe is currently putting its own competitiveness at risk. We must stop this development,” explains Joachim Strobel, Chairman of the Construction Machinery specialized group of VDMA.

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