Earthmoving & construction machinery: out of the crisis in two years time

Presentation of the SaMoTer-Veronafiere Outlook, developed in collaboration with Prometeia

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The Outlook of national and world market trends for the next two years was outlined today at Veronafiere during the first edition of SaMoTer Day, a training and guidance event focusing on opportunities and trends in the building and construction machinery market.

The earth moving machinery market can expect the recovery to start in 2016. Progressive resumption is forecast next year on a global scale which will be consolidated in 2017, with total sales of 880,000 units, up by 33% compared to estimated results for 2015. There will be a favourable trend over the next two years for the sector in Italy which, following the vertical collapse of 2007 (-72%), seeks to close 2017 with 12400 units, up 44.8% over the performance in 2015.

These forecasts for the sector were presented by Veronafiere through the new SaMoTer-Veronafiere Outlook event organised in collaboration with Prometeia, an international economic consulting and research firm. The results of the observatory analysis were presented today during the first SaMoTer Day, the training and guidance event focusing on opportunities and trends in the building and construction machinery market in Italy and world-wide (www.samoter.it).

The initiative is one of the run-up events leading to the appointment with the 30th edition of SaMoTer (22-25 February 2017) – Veronafiere's triennial show dedicated to the construction equipment sector held in conjunction with Asphaltica, the bitumen and road infrastructure event organised together with Siteb (Italian Bitumen, Asphalt and Road-Building Association), and Transpotec Logitec, the road transport and logistics appointment by Fiera Milano.

“SaMoTer Day provides companies with an effective market intelligence tool that helps them respond to rapidly changing international business scenarios,” said Giovanni Mantovani, CEO & Director General of Veronafiere -. “The signals coming from the earth moving sector for the next two years are encouraging and we are consequently already working to make SaMoTer 2017 even more useful for companies who want to catch and benefit from this recovery.”

The 2017 edition of SaMoTer, in addition to its exhibition and commercial aspects, will also focus on the management and prevention of environmental emergencies, with thematic focus meetings dealing with on land consolidation sites and the Government #italiasicura plan which envisages investments of over 7 billion euros and 3500 different projects.

The Inaugural Conference of SaMoTer Day saw the CEO & Director General of Veronafiere joined by Michele Turrini, President of Siteb, Giuseppe Garri, Transpotec Logitec exhibition manager, and Roberto Paoluzzi, Director of Cnr-Imamoter (National Research Council Institute).

SAMOTER-VERONAFIERE OUTLOOK: ANNUAL REPORT AND FORECASTS FOR THE FUTURE

The global market for excavators, concrete plant, drilling, crushing and asphalting machinery, cranes and site vehicles is still affected by the vertical collapse (-48%) in the two-year period 2008-2009. 2015 was still a tough year of a global scale: in the first nine months of the year, 61,000 earthmoving fewer earth moving machines were sold (-11%) compared to the same period in 2014. In terms of macro-areas, growth was only seen in India (63,000 units) and North America (148,000 units). Matters were worsened by the bursting of the Chinese “bubble” (-37%) that in 2011 took one third of all international sales and the situation in Russia (-70%). Despite the positive development trend for construction activity, Prometeia estimates that the year will close with a loss of 9%.

The good news for the sector – again according to the analysis in the SaMoTer-Veronafiere Outlook – will come with the new year and continue in 2017 with a slow re-alignment of growth in the construction field (880,000 units sold; +33% over 2015). In addition to mature markets such as North America and Japan, in Europe the main input comes, in order, from the United Kingdom, Germany, France, Italy and Spain. Among emerging countries, India takes first place, followed by Latin America.

As regards Italy, after continued acceleration in the last five quarters, Prometeia estimates a final figure for 2015 of 8500 new machines sold (+27%) which will rise to over 12,000 in 2017 (+44.8% compared to 2015).

The Samoter-Veronafiere Outlook also analyses the trend in the construction sector. Forecasts for India – one of the most dynamic markets for residential construction and civil engineering alike – suggest it should close 2015 at +5.6% of investments, climbing further to +6.9% in 2016 and +7.4% in 2017. North America is making tentative recovery, with an increase of 5% expected for 2016 and also 2017. China over the next two years, on the other hand, should stabilise at an average growth rate of 4%, while Latin America will only post positive figures (+4.1%) at the end of 2017 and will still suffer from ups and downs: while Brazil and Venezuela are down, the situation in Mexico, Argentina and Colombia is improving.

Estimates for Western Europe are more cautious: +2.2% in 2016 and +3% in 2017. Going into more detail for the “old continent”, Germany in 2016 will be driven by non-residential construction, thanks to a three-year investment plan amounting to 15 billion euros. The United Kingdom, on the other hand, is ready to launch a national infrastructure plan worth 120 billion euros in the two-year period 2016-2017. Moving eastwards, Russia continues its negative performance, with reduced investments in all construction sectors: only as of 2017 will one see the first signs of growth, largely because of the onset of work worth 17 billion euros planned for the 2018 World Cup.

In North Africa and the Middle East, finally, there are business opportunities in Saudi Arabia, the UAE, Egypt and Iran.

On the Italian front, after the still negative closure expected for 2015 (-1.5%), positive figures will return in 2016 (+1.2%) and 2017 (+2.3%). In 2016, the new stability budget will give new impetus to investments in public works thanks to the release of 1 billion euros in the stability pact involving local councils, joined by 500 million euros for school buildings and a further 8 billion euros from the European investment plan for Italy.