VDMA: Europe’s situation ‘tense but not dramatic’

Germany’s Construction Equipment and Plant Engineering (VDMA) trade association has reiterated its previous forecast of a 10% to 30% decline in sales for 2020.

The figures were delivered during a virtual annual conference, intended to take stock of the current coronavirus crisis.

Positive messages from VDMA were that construction companies are still benefiting from solid order backlogs and that significant economic recovery packages are expected from the European Union.

For Europe as a whole, the VDMA forecast is for a decline of 25% in construction equipment sales.

Between January and May, incoming orders for construction equipment manufacturers in Germany declined by 26%, year on year. Between March and May, the situation deteriorated, with orders 40% down on the same period in 2019.

The UK, France and the southern European construction markets, are the worst affected by the crisis and will fare significantly worse than the global market, which has declined by 15% during the first five months of 2020.

Nonetheless, there is, says VDMA, the industry remains positive about the future, as countries begin to emerge from their respective lockdown situations.

The latest VDMA Covid-19 survey reports that 31% of trade association members expect equipment sales to return to 2019 levels by 2021, while almost half of respondents (47%) predict a return to 2019 levels by 2022.

As well as 88% of respondents stating that supply chain issues were either minor or non-existent, none of those surveyed believed it would take more than four years to achieve sales levels equivalent to 2019.

One of the major concerns for companies getting back to business as the crisis eases is the increased levels of competition. More than 80% of those surveyed said this was a severe or noticeable concern.