European construction equipment still on growth path
Strongest year since the economic crisis a decade ago sees sales rise 11% in 2018
2018 was the strongest year for the European construction equipment sector after the economic crisis of 2008/09, with sales up 11% and the absolute market level now 10% below the 2007 peak. Following a 5% sales increase in the first quarter of 2018, sales were up 8.5% and 9.4% in the second and third quarter respectively, whilst the last quarter saw an unexpected boom with sales up by 15% year over year.
These are among the main findings of the 2019 Annual Economic Report of the Committee for European Construction Equipment (CECE), published today.
According to the report, most regions in Western and Northern Europe saw steady growth last year. Coming from already high levels, many of these markets reached new record levels, whilst Southern Europe and Central and Eastern European markets continued their recovery and grew at above-average levels.
Sales of road construction equipment in the European market increased by 12% in 2018. Similar to earthmoving equipment, this saw sales reach their highest levels since the economic crisis 10 years ago. Nevertheless, building construction equipment was once again the best-performing of the sub-sectors in 2018.
The general scenario is not expected to change significantly in 2019, with the global construction equipment industry likely to remain on a growth path, albeit with somewhat slower momentum. If global developments are not overshadowed by an aggravation of trade conflicts, a 5–10% increase in sales in the world market is thought to be realistic.
However, following what has been a relatively long upward cycle in Europe, CECE says it is not realistic to expect the same levels of growth as in 2018. It believes that even if the big uncertainties – most prominently Brexit and the risk of a global trade war – do not yield negative fallout, a cyclical downturn in Europe in the second half of 2019 is a realistic scenario.
As a result, the forecast for the European construction equipment market is for sales to be between 0% and –5% in 2019, according to Sebastian Popp, economic expert at CECE, who said this ‘would still represent a good year for the industry and would by no means be bad news’.
A copy of CECE’s Annual Economic Report 2019 can be downloaded below.