European construction equipment sales growth

European construction equipment market was the second most dynamic region in 2014, says CECE

ACCORDING to the Committee for European Construction Equipment (CECE), 2014 was a troubled, yet good, year for the European construction equipment industry, with sales on the European market up by 9% compared with 2013, and exports showing a slight momentum of growth. Behind North America, the European construction equipment market was the second most dynamic region of the world last year.

‘This is a positive development but we have to bear in mind that the good performance was just enough to recover what had been lost in 2013. The market is still more than 40% below the record levels seen in 2007,’ said Sebastian Popp, economic expert at CECE.

Once again, there were huge disparities, with Southern Europe remaining at very low absolute levels whereas markets such as the UK and Germany were not far away from pre-crisis levels. Turkey and Russia, meanwhile, had a particularly poor year with market declines of 25% and 37% respectively.

In total, 135,000 units of earthmoving equipment were sold in Europe (including Russia and Turkey) in 2014, representing an increase of 6% and returning the sector back to the levels of 2012. On an aggregate level, however, the industry lost momentum over the year, with the negative impact particularly attributable to Russia.

Growth of 32% pushed the UK earthmoving equipment market to the second place in Europe, behind Germany. The German market, already on comparably high levels, managed further growth of almost 10%. Nordic countries were equally robust last year and grew by 10.5% on average.

In Western Europe, the Netherlands (+35%), Belgium (+11%), and Austria (+14%) were strong, while the French market worsened significantly over the year. Southern Europe also delivered some signs of life, albeit at an extremely low absolute level: the Spanish earthmoving market grew by 54%, the tiny Portuguese market jumped by 69%, and Italy, the only remaining volume market in Southern Europe, saw growth of 20%.

In terms of products, compact earthmoving equipment performed more strongly than heavy equipment; this applied, in particular, to mini-excavators and compact wheel loaders. Heavy equipment sales also grew in 2014, but the weakness of the mining and quarrying sector, lack of infrastructure investments, and the Russia crisis all had an impact on this area.

In 2014, the total sales growth of road construction equipment amounted to 19% compared with 2013. Rates of growth were similar across product groups: light compaction equipment sales increased by 20%; sales of self-propelled rollers were 16% above 2013 levels; and sales of asphalt pavers grew by 21%.

The picture was less positive for the building construction equipment sector, largely due to a flat building sector in Europe after two consecutive years of decline, as well as a statistical base effect (strong growth of equipment demand in 2013). Total sales of concrete equipment in 2014 were 13% below the previous year’s levels.

Looking ahead, CECE says the prospects for 2015 do not look too bad. ‘It is likely that recovery will continue, however the extent of it is more questionable,’ said Mr Popp. ‘The European construction industry should be on a recovery path, with all three sectors of construction having a positive growth forecast. Likewise, the mining and quarrying sector might have weathered its crisis and could stimulate demand.’

However, much uncertainty emanates from political crises, the Russia-Ukraine conflict being probably the most severe one for the European equipment industry, while any flaring up of the Euro crisis could further impede the readiness of customers to invest. Against this backdrop, CECE says a flat market or slight growth appears to be the most realistic scenario for Europe in 2015.