Shortages delay equipment production, says VDMA

VDMA, the Germany-based Mechanical Engineering Industry Association, reports that supply chain problems are delaying the production of construction equipment, with statsitics show a gap between incoming orders and turnover.

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However, the association said the construction machinery and building material plant sector achieved a 22% increase in turnover of €16.7 billion in 2021, compared with the previous year.

VDMA added that the construction equipment sector achieved a nominal increase of 18% to €12.4 billion with incoming orders up by 53%. In addition, export turnover was €8.1 billion, domestic turnover was €4.3 billion and road construction machinery achieved the highest increase in turnover with 22%.

This development catapults the industry back to the record level of 2018/19 says the VDMA. Nevertheless, expectations for turnover are cautious this year with the ongoing disruption 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 USA, Europe and China remain the most important market regions and together account for 75% of the global market.

Construction equipment sales in 2021 increased by 30% in the US and 28% in Europe compared to the same period last year whilst China weakened with a 7% decline.

The US market is promising for the next few years assures the VDMA and this is with thanks to extensive economic stimulus programmes.

The economic stimulus programmes launched during the pandemic in Europe will have a supporting effect in the next 2-3 years. In China the development is uncertain with the risk of a real estate crisis still present there.