European equipment market faces ten-year low

According to Off-Highway Research's annual review of the European construction equipment market, sales fell -25% last year. Unit sales hit a record 211584 units in 2007 - the only time the market has been above 200000 machines - but fell back to 160952 units last year as credit dried up.

The specialist economic forecasting company is predicting a fall of similar magnitude this year, with the market seen dropping another -26% to 119274 machines. The last time volumes were this low in Europe was 1998.

However, a gentle recovery is seen next year, with a +2% rebound in sales to 121683 units, with growth continuing in 2011, 2012 and 2013. Off-Highway Research expects the market to come back to about 147000 machines per year by 2013 - close to the levels seen in 2004, at the start of the last boom.

2008 review

All the Western European equipment markets fell last year, with the exception of Sweden. In terms of the greatest impact on Europe as a whole, the -68% collapse in Spanish sales was most devastating, while the UK was notable for its worse than average -28% decline. Looking at the other ‘Big 5' countries, France was down -13%, Germany -16% and Italy -22%.

Among the smaller markets, Ireland stood out with a -60% drop and Denmark was down -33%. Belgium, Finland and Switzerland were the only countries to get a way with single-digit declines.

Forecasts for this year suggest Spain and the UK will continue to be troubled, with -30% and -43% declines expected. France also looks troubled, with a -45% decline expected due to falling housing starts and cut-backs in Public spending. The equipment market in Germany is expected to slip another -16%, while Italy wil be down 19% according to Off-Highway Research.

Only Portugal is expected to see increasing equipment sales this year, with a +6% rise forecast. All the remaining Western European countries are seen suffering further double-digit falls in equipment sales this year. The only exceptions are Austria, Finland and Switzerland, where -5%, -9% and -5% falls are forecast respectively.

In terms of the impact on different types of equipment, this year's -26% fall is expected to be felt fairly evenly across the board. Off-Highway Research expects articulated dump trucks (ADTs) and mini excavators to be hardest hit, with -31% and -30% declines in unit sales. Graders and telescopic handlers will be least affected, but will still see -21% and -20% falls in demand.

Global comparison

On a wider scale, Off-Highway Research expects equipment sales in five key global regions to fall -15% this year. The decline comes on top of the -11% total fall in equipment sales seen across China, Europe, India, Japan and North America last year.

India, Japan and North America are expected to see falls this year, with the Chinese market staying flat. This is expected to see the world market fall to 537866 machines, down -15% year-on-year, and almost -25% lower than the peak in of 713863 units seen in 2007.

For more information, visit www.offhighway.co.uk