Risks ahead

6 May 2016

BAUMA is returning to Munich this month. For those who have never been, Bauma is a construction and mining equipment trade fair held in the Bavarian capital once every three years.

It is huge, with over 500,000m2 of exhibition space, around 3,500 exhibitors and over 500,000 visitors from all over the world. It also enjoys a lot of public interest; local German parents can be seen showing their children around the equipment displays, having paid the USD 50 daily entrance fee.

Ahead of the event, the German Engineering Federation (VDMA), which represents German manufacturers, has assessed the industry based on its members’ performance and market analysis. In summary, German manufacturers are doing well, but globally the market experienced a “double digit downturn”.

Johann Sailer, chair of the Construction Equipment and Building Material Association within the VDMA said: “German companies were not as much affected by the severe downturns, e.g. in China, Latin America and Russia. Instead, we participated in the above-average positive developments of the European, Middle East, and North American markets.”

Prospects for 2016, however, are mixed according to the association. Construction equipment manufacturers are “expecting positive stimuli for their business in Southern and Central Eastern Europe and believe that the high-volume markets of Germany, UK, Scandinavia and Benelux will remain robust. Internationally, it is particularly the Indian market that is giving rise to hopes”.

The problems, according to VDMA, come from the risk present in the global market. Political confiicts and violence, excessively low prices for oil and raw materials, as well as several regional unresolved economic crises are worrying.

Every region is affected differently. Russia is expected to continue at a very low ebb, Latin America and China will not dazzle the world with growth, and North America and the Middle East are expected to become a little disappointing.

VDMA hopes that the industry as a whole will experience three per cent growth, but because of wildly varying regional circumstances, individual companies are also expected to have wildly different experiences of the coming year. Although Bauma i a positive, says Sailer.

The VDMA signs off its pre-Bauma analysis by taking aim at the ongoing European political debate on exhaust emissions.

“A major backlash can be expected,” a spokesman stated. “According to the latest plans drawn up by Berlin’s Senate Department for Urban Development and the Environment, all construction equipment will need to be colour-coded to indicate its emission level. This is already being done for cars. When applied to construction equipment, however, the new regulations are threatening to put a stop to any modernisation. Machinery equipped with extremely complex and expensive exhaust emission after-treatment will be but in a worse position than ancient, inefficient machines retrofitted with diesel particle filters (DPFs) which only achieve good values when it comes to particulate emissions.

“Berlin is thus threatening to play an environmental prank, as the pollution caused by such outmoded machinery is several times higher. Moreover, it is twice as noisy, uses about 15 per cent more fuel and emits over 90 per cent more nitrogen oxides”