Materials shortage and supply chain issues are tempering strong German construction equipment demand in early 2022, according to the VDMA.
The German construction equipment market is a mixed picture in 2022.
While construction equipment orders remain healthy, the association, which represents more than 3,400 German and European mechanical and plant engineering companies, reports turnover uncertainty, as materials continue to be in short supply and supply chain problems are delaying the production of construction equipment.
New VDMA figures for 2021 show that the German construction machinery and building material plant sector achieved a 22% year-on-year increase in turnover to €16.7 billion. The construction equipment sector achieved a nominal increase of 18% to €12.4 billion. Incoming orders were up 53%. Export turnover was €8.1 billion, while domestic turnover was €4.3 billion.
In a statement released with the new figures, the VDMA says it is gratifying that building construction, earthmoving and road construction machinery show a homogeneous distribution. Road construction machinery achieved the highest increase in turnover with 22%. The association said this development catapults the industry back to the record level of 2018/19. Nevertheless, expectations for turnover are cautious this year, says the VDMA. The organisation believes the biggest risk, in the experience of many manufacturers, lies in the ongoing disruptions to supplies.
"We are pushing a wave of orders ahead of us that we will probably have to carry into 2023 if the situation remains like this," said Joachim Strobel, chairman of the VDMA's construction equipment division. "Despite full order books, the industry can only expect a maximum increase in turnover of 7% for the current year. Profit will also fall short of our expectations because we have to contend with enormously increased costs."
The VDMA notes that the USA, Europe and China remain the most important market regions, accounting for 75% of the global market. Construction equipment sales in 2021 increased by 30% in the US and 28% in Europe compared to 2020. China weakened with a 7% decline. Globally, sales rose 18% overall, 32% excluding China. Nevertheless, the country remains the largest single market.
The VDMA says the US market is promising for the next few years. "Thanks to extensive economic stimulus programmes, golden times could dawn for the construction sector in the United States. In Europe, the economic stimulus programmes launched in the pandemic will also have a supporting effect in the next 2-3 years. In China, the development is uncertain, the risk of a real estate crisis is still present there," continued the Association statement.
In Germany, construction equipment sales rose by almost 10% last year, and demand from the customer industries remains high in the current year. The VDMA says this "boom" will even be able to defy the shortage of skilled workers and material bottlenecks.
At the top of the agenda for construction equipment manufacturers, according to the VDMA, are reducing CO₂ and advancing digitalisation. The association says there will also be key topics at this year's leading trade fairs for the construction equipment and building materials plant sector. ceramitec in June, glasstec in September and bauma in October will showcase trendsetting developments. "We are all looking forward to our presence at trade fairs. At last, we can again show on a large scale what technical progress we have already worked out so that we can achieve the climate policy goals," emphasises Franz-Josef Paus, chairman of VDMA Construction.
