Construction

Germans optimistic for 2014

Manufacturers expect 5% growth in sales this year

German manufacturers of construction equipment and building material machinery are expecting a 5% rise in sales in 2014, says industry association VDMA, with incoming orders for construction equipment currently up 7%.

The projected growth follows a decline in turnover for German companies in 2013, with total industry output dropping 6% to €11.7 billion.

The Middle East markets are picked out as one of the few global areas, along with Russia and South-East Asia, where business is currently going well for building materials machine manufacturers.

Meanwhile, in 2013, BRIC nations (Brazil, Russia, India and China), as well as South Africa and Indonesia were seen as weak.

“We can look back on a satisfactory business year overall; given all the heterogeneity of our sector”, said Johann Sailer, chairman of the VDMA’s Construction Equipment and Building Material Machinery Association.

With a seeming thaw in relations with Iran, manufacturers are hoping that this market will again emerge, where German brands enjoy a good reputation, said Sailer.

“We know about the good reputation, which our machinery and plant enjoy there. The customers are there, the demand is there and also the desire and will of the German industry to deliver.” The problem is the banks. Currently it is simply not possible to get any capital investment”.

Closer to home, the EU’s emissions directive is causing a stir in the market.

“A topic of constant worry for the construction equipment manufacturers is the implementation of the EU emissions directive,” explained Sailer. “In some companies this issue has tied up R+D capacities by almost 100 percent. As a result, innovations in other sectors have fallen by the wayside. A further challenge is the recent new complexity, i.e. the diversity of the products offered per manufacturer.

“There is currently a product renewal process like never before”, Sailer pointed out. Because various transitional periods are also used in different ways by the manufacturers, the market is responding correspondingly. For the customers the new machines produced at extremely high development costs did not automatically mean greater benefit or product improvement. To that extent, it was difficult, he said, to convince them to pay a higher price for the machines. Many manufacturers have thus suffered.”

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