Building materials

Material shortages and supply chain issues frustrate strong German demand for construction equipment in 2022

By Jennifer L. Carter

The German construction equipment market is mixed in 2022.

While orders for construction equipment remain healthy, the association, which represents more than 3,400 German and European mechanical engineering and plant companies, reports uncertainty over turnover as materials continue to be in short supply and supply chain issues are delaying the production of construction equipment.

New figures from the VDMA for 2021 show that the German construction machinery and building materials plant sector recorded a 22% increase in turnover year-on-year to 16.7 billion euros. The construction equipment sector achieved a nominal increase of 18% to 12.4 billion euros. Incoming orders increased by 53%. Export turnover was 8.1 billion euros, while domestic turnover was 4.3 billion euros.
In a press release published with the new figures, the VDMA is pleased that the construction, earthmoving and road construction machinery shows a homogeneous distribution. Road construction machinery achieved the highest increase in turnover with 22%. The association said the development catapults the industry to the all-time high of 2018/19. Nevertheless, turnover forecasts are cautious this year, indicates the VDMA. The organization believes that the biggest risk, in the experience of many manufacturers, is continued supply disruptions.

“We are pushing ahead of us a wave of orders which we will probably have to carry until 2023 if the situation remains like this,” said Joachim Strobel, president of the construction equipment division of VDMA. “Despite well-filled order books, the industry can only expect a maximum revenue increase of 7% for the current year. Profit will also be below our expectations because we have to do in the face of extremely high costs.”

The VDMA notes that the United States, Europe and China remain the largest market regions, accounting for 75% of the global market. Sales of construction equipment in 2021 increased by 30% in the United States and by 28% in Europe compared to 2020. China weakened with a decline of 7%. Overall, sales increased by 18% in total, 32% excluding China. Nevertheless, the country remains the largest single market.

The VDMA says the US market is promising for the next few years. “Thanks to extensive economic stimulus programs, golden times could dawn for the construction sector in the United States. In Europe, the economic stimulus programs launched in the pandemic will also have a supporting effect in the next 2-3 In China, development is uncertain, the risk of a real estate crisis is still present there,” continues the statement from the Association.

In Germany, sales of construction equipment increased by nearly 10% last year and demand from customer industries remains high this year. The VDMA claims that this “boom” will even be able to challenge the shortage of skilled workers and material bottlenecks.

According to the VDMA, the priorities of construction equipment manufacturers are reducing CO₂ emissions and advancing digitalization. The association says there will also be key topics at this year’s major trade shows for the construction equipment and building materials plant sector. ceramitec in June, glasstec in September and bauma in October will present avant-garde developments. “We all look forward to our presence at trade shows. Finally, we can once again show on a large scale the technical progress we have already made to achieve the objectives of climate policy,” emphasizes Franz-Josef Paus, President of VDMA Construction.

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Jennifer L. Carter
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