Positive machinery outlook
9 March 2022
The market for construction plant and machinery is likely to maintain its strength in 2022 despite potential economic challenges.
That was the view expressed by the CECE (Committee for European Construction Equipment) at a recent press conference to present the findings of its Annual Economic Report for 2021.
“Demand benefited from a combination of stable performances by different end-user segments and pandemic stimulus measures, whose potential fully unfolded in 2021,” said Alexandre Marchetta, CECE President. “On the other hand, the construction equipment industry also experienced the most severe supply-chain disruptions in recent history, in particular shortages of raw materials and components, as well as scarce and expensive freight transport.
“Against this backdrop, the 24% increase in sales in 2021 on the European market is a remarkable outcome. The European construction equipment industry is indeed resilient as shown over the last two years. The continued increase in demand in our largest markets, the European recovery programme and the global construction boom are boosting our business.”
Sales levels were close to the record figure recorded in 2007, he said.
The business climate index for the industry recorded its highest ever value in the July 2021 survey and maintained extremely high levels throughout the rest of the year. In the first two months of 2022, there was another small improvement both for the current business situation and future sales expectations.
European manufacturers expect supply-side bottlenecks to improve, although the demand-side clearly remains strong, as all equipment sub-sectors were expecting business to improve in the months leading up to the summer of 2022. In February this year, the CECE’s Business Barometer highlighted that more than 50% of manufacturers surveyed were experiencing order backlogs of six months or more. That was up from 36% last November.
The committee points out, however, that expectations are obviously likely to be negatively affected by the current tensions and the effects of the war in Ukraine, which cannot be estimated yet.
Riccardo Viaggi, the CECE secretary general, spoke of the challenges as the construction industry moves towards net zero. He believed that there was no single technological solution for decarbonisation and that many elements must be considered, including fuel efficiencies, other alternative fuels and dealing with legacy fleets.
“Electrification is indeed part of the mix but we are definitely calling on legislators to see that there are no technology decisions made by the legislators and policy makers when it comes to future machinery,” he said.
He emphasised the focus on total cost of machine ownership, whereby an initial upfront investment could turn into a productivity investment without impacting negatively on a company’s balance sheet.
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