The construction world closes a black year and looks to 2010 with extreme prudence
A recovery for building and road machines, awaiting government action to support the sector, is expected this year
The future is no longer black but dark grey: this is how Cece, the European association of construction machinery industries, summarised the “sentiment” of trade operators in this difficult start to 2010 in its periodical market barometer.
Because 40% of companies in 2009 posted turnover less than half that of 2008, while the average downturn was 37%. Forecasts for this year are by no means rosy but the expectation is for growth of around 5% in turnover compared to the very modest level seen in 2009. This tiny signal going against the trend suggests that the future will be dark grey rather than black; there is hope that the crisis is bottoming out and that an upswing is on the way with an assurance of a stable and structured economic recovery.
All over the world, deliveries of earth moving machinery in 2009 fell by a dramatic 41.8%, with even more significant setbacks for sales in North America, down by 64% compared to 2008, in Eastern Europe by 70% and Russia - where90%
Cece data also indicates that deliveries in the European Union last year fell by 60% compared to 2008 - although that last few months have seen a certain stabilisation and even a slight recovery in Spain and Italy.
Moving over to the Italian market, a small but positive signal comes from the survey conducted by Isae in December involving a panel of 500 construction companies: the index of trust improved from 67.1 to 71 - still low compared to average values in 2009 but in any case on the up-turn. Construction companies are less pessimistic as regards construction plans for the current year and prospects for employment. This in any case is an important signal for the constructions machinery industry, which is experiencing a very critical situation.
Forecasts by Cresme are more prudent in its report titled “The construction market in 2010”, suggesting that the true recovery will not arrive before 2011. And in particular, the recovery process will not be guided by advanced but emerging economies such as China e India through to countries in northern Africa. These economies in 2009 saw increases in Gdp of between 4% and 8.5% when MIF estimates for the euro area indicate a meagre +0.3%. In the meantime, figures for 2009 were dramatic.
The Italian market for earth moving machinery closed 2009 with an overall drop in sales of 37% (14,732 units sold this year against 23,393) - unfortunately encompassing a major setback for exports (-63.3% in the first ten months of 2009). Turnover in the construction machinery and equipment sector - with about 150 companies (excluding allied business) and about 6500 employees - dropped from about 4 billion euros in 2008 to just 2 billions, 1.2 of which directly from the earth moving sector.
Detailed analysis of machinery typologies shows that bulldozers, motorised levellers-excavators and mechanical shovels fell back by 31.4%, minor machinery by 37.8%, wheel-loaders by 44.4%, dumpers by an astonishing 54.6% and telescopic hoisting/lifting systems by 40.3%.
Road work machinery a fell back, with a decrease of 35.2%
Forecasts for 2010 show no signs of recovery on the domestic market or as regards exports. In this situation, companies are demanding urgent action to support the sector, that risks decimation caused by this unprecedented recession.
The situation for construction, road building and mining machinery is similar: turnover is no longer supported by exports, with a major drop of -38.6%, and is penalised by an unfavourable trend in the national construction market on all fronts with a downturn of 35% in the value of production for a total of 2.6 billion euros.
Employment ( –10%) and investments (–25%) are also down. The trend in 2009 was negative for all trade categories, but the hardest hit field was tower cranes with exports falling by 70%. There was also a sharp brake in the concrete sector with an average drop of 47% with a a peak of -70% for truck-mounted pumps.
Forecasts for the current year are prudently positive and glimpse a slow and complicated recovery. The value of production should grow by a modest yet significant 7.7 %, while exports in parallel will increase by 8.6%. The true recovery is only expected in 2011.
Lastly, data for registrations of site and quarry vehicles (including cab versions and tractors): as is to be expected, this segment is also decidedly negative with a downturn of around 50% compared to 2008, a year which also saw a decrease, albeit modest compared to levels in previous years. In 2009 as a whole, quarry and site vehicles registered in Italy came to 2360 units, compared to 4596 in 2008. Numbers dismally way below the 6200 vehicles registered in 2002 and even the 5400 new registrations in 2006. The recession has struck national and international brands without “distinction”*.
*Processing of Anfia, Cece, Comamoter, Cresme, ISTAT, Ucomesa, Unacea data.
Verona, 5/3/2010
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