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2. Moderate growth for the European equipment market

The construction equipment market in Western Europe is expected to rise one per cent this year, accelerating to three per cent growth in 2017, according to Off-Highway Research’s European Mid-Year review.

We forecast that 128,631 pieces of equipment will be sold across 15 major markets this year, with France and parts of the Nordic region looking most buoyant. However, these gains will be offset by a sharp decline in the UK, along with several smaller markets, including Belgium and the Netherlands. The patchy recovery in Southern European equipment markets is continuing, with strong growth in Italy, a more measured improvement in Spain and falling sales in Portugal.

Equipment sales in France saw a sharp -14 per cent decline in 2015, but the country is expected to bounce back with a 15 per cent rise this year, followed by further growth of 12 per cent in 2017, taking the market to 25,670 machines. One of the key drivers behind this has been economy minister Emmanuel Macron’s ‘Loi Macron’ (Macron Law), which has provided significant tax breaks on the purchase of construction machines and other industrial equipment.

On the downside, the expected -11 per cent drop in the UK construction equipment market this year is partly attributed to the effects of the ‘Brexit’ referendum, which will see the UK leave the European Union. Sales were slowing in the run-up to the June vote, and the unexpected decision to leave the EU and the accompanying economic uncertainty is likely to hit construction equipment sales. The change in Prime Minister following the referendum might also see major infrastructure projects in the UK reappraised, particularly if the country falls into recession.

But on balance, the outlook for Europe is positive. “In spite of the uncertainties, the overall trend remains encouraging, with only four of the 15 countries – the UK, Ireland, Norway and the Netherlands – expected to see a fall in sales in 2017. Albeit still well below the 10-year average of 135,860 units between 2006 and 2015, annual sales of 132,465 units represent a 4% increase in demand since 2015, and 18% since 2013,” said the report.

The latest report is part of Off-Highway Research’s monthly European Market Reports subscription service. Click here for more details. Subscribers to our European Service can access and download the report from our Internet Access Service portal.