ANNUAL ECONOMIC

REPORT Executive Summary

No.9
M A R C H 2023

Dear reader,
CONSTRUCTION INDUSTRY
Welcome to the CECE Annual Economic Report! During the past six months there have been sig-
nificant changes in Europe that have impacted on
2022 was the year of resilience and strength! What can we expect the economic environment for construction. This
from 2023?
includes the war in Ukraine and the anxiety it has
The report you are reading contains an in-depth analysis of the caused across the region. As a result, the outlook
macroeconomic situation in Europe, insights into your major client for growth in new residential construction has
sectors, such as construction, mining and rental and a substantial deteriorated. The outlook is not much brighter
focus on the sales performances of machinery & equipment. when considering the situation in other sectors
within the construction industry.
In terms of highlight, last year was all about showing resilience
and strength. Indeed, an apparent perfect storm of supply chain
disruptions, high inflation and war in Europe has been brewing MINING INDUSTRY
all along the year. Russia’s aggression against Ukraine has brought Exploration and drilling activity in the global min-
open war on the European continent and has had a profound ing market continued to show growth in 2022.
impact on the European economy in terms of energy security and affordability. For our industry, Russia Exploration budgets for the major global mining
is an important export market, but as the figures show, the 40% drop in sales in Russia has been largely companies exceeded 2021 and 2020 levels, and
replaced by other trade flows. If we don’t account for this drop, overall sales of construction equipment in fact were the highest since 2013. Over 80% of
in Europe are actually up by 3%. spending was on exploration of gold and base
metals. Drilling activity was also strong in 2022,
Other global regions of Europe’s export have also kept a strong pace. We are publishing this report
matching the 2021 levels.
during the frantic preparations for CONEXPO-CON/AGG where European CE manufacturing will be at
the centre stage in a growth oriented market like that of North-America.
EXTRA FEATURE: RENTAL INDUSTRY
The business sentiment that we gauge monthly through the CECE Business Barometer has moved back The ERA/IRN RentalTracker for the fourth quarter
into optimistic territory at the end of 2022, right around bauma in Munich. The full order books allow of 2022 confirms the faltering confidence in Eu-
us to believe that early 2023 will remain positive, but the uncertainties around inflation and interest
rope that was first hinted at in the June 2022 sur-
rates provide for a very unstable macroeconomic picture. It is now difficult to make a numerical forecast,
vey, but there is no collapse in sentiment. There
but the Equipment Market chapter of this report will provide some relevant market intelligence leads
remains a positive balance of opinion on current
for companies and investors to ponder.
business conditions in Europe, but only just.
Please share this report within your network with no moderation! Indeed, as a publicly available source
of information, the CECE Annual Economic Report helps to promote the knowledge and understanding EQUIPMENT MARKET
of the sector amongst the wider audience. Comments are always welcome and can be directed to info@
In a very challenging economic and geopolitical
cece.eu. If you want to get an overview of the report before reading it, please take a look at this video.
environment, the European construction equip-
We strive to provide CECE members and the public with all relevant information and intelligence, ment market defied the odds in 2022. Sales in the
produced by our own team of economists. Indeed, this report is produced by a small group of experts European market almost reached the same level
from the CECE member associations and the CECE team in Brussels. Please read more about them on as the previous year, and only saw a minimal 0.6%
page 17. The report also includes information provided by our national member associations, shedding decline.
light on specific market developments.

I hope you will enjoy the reading! OUTLOOK

At the beginning of 2023, manufacturers are report-
ing a positive business situation and near-term fu-
.
Riccardo Viaggi ture expectations. Thanks to the strong order back-
CECE Secretary General log, the first half of the year can be considered “safe”.
For total 2023, a soft landing with single-digit sales
declines on the European market seems realistic.

March 2023 CECE ANNUAL ECONOMIC REPORT 1

MACROECONOMIC VIEW

2022: the great awakening

of inflation

F
rom an economic perspective, a The damaging effects of higher infla- Following the surge in inflation in
sustained resurgence in the level of tion have been experienced in 2022 2022, the rise in key interest rates dic-
prices was the most striking feature with the loss of purchasing power for tated the tempo on the various mar-
in 2022. It led to a shift in monetary organisations whose income is not in- kets - foreign exchange markets, stock
policies towards a more restrictive ap- dexed to inflation (companies with markets, and the interest rate market.
proach, involving increases in interest low pricing power, employees, etc.).
rates and a gradual exit from uncon- They are also due to the reappearance of In 2022, the Federal Reserve and
ventional policies with the start of the significant imbalances on a global scale. the ECB implemented the biggest in-
reduction in the size of central banks’ crease in rates that they have made
balance sheets. Economies with a high level of in- in a single year. As a result, 2022
come and low overall savings have marked the end of an exceptional pe-
The surge in inflation was the result suffered a drain on their purchasing riod – one involving negative rates.
of the significant imbalances that power (the euro zone in particular).
the world economy had to deal with While inflation keeps reducing house-
during the pandemic. This was a re- The economies that have benefit- holds’ disposable incomes, the de-
sult of the significant budgetary and ted the most are those with a low cline in economic activity is set to
monetary stimuli deployed by many absorptive capacity and high savings continue in the first quarter of 2023.
countries during 2021, which led to (Middle East, Norway) or whose de- In Europe, growth is expected to re-
great pressure on production capaci- mand is constrained (Russia). In ad- turn in the spring as inflation gradu-
ties and resulted in many shortages. dition, the restriction on mobility in ally relaxes its grip on the economy.
China during the pandemic for most
The start of the conflict in Ukraine of 2022, impacted on activity levels. However, with powerful headwinds
created further shocks to the econ- still holding back demand, economic
omy resulting in increases across a All in all, the post-Covid rebound activity is set to be subdued, with
wide range of commodity prices, but phase is over. It gave way to growth GDP growth expected to reach 0.3% in
which turned out to be temporary. that weakened throughout the year. 2023 in both the EU and the euro area.

Gross Domestic Product growth in % Gross Investment in equipment in %

2021 2022 2023 2024 2021 2022 2023 2024
Germany +2.6% +1.8% +0.2% +1.3% +3.5% +2.2% -0.2% +3.2%
France +6.8% +2.6% +0.6% +1.4% +8.5% +2.4% -5.1% +3.9%
UK +7.4% +4.2% -0.9% +0.9% +11.7% +5.9% -1.4% +2.6%
Spain +5.5% +5.5% +1.4% +2.0% +6.3% +5.6% +1.0% +2.9%
Italy +6.7% +3.9% +0.8% +1.0% +17.5% +9.6% +1.4% +1.7%
EU +5.4% +3.5% +0.8% +1.4% +8.9% +3.7% +0.1% +2.9%
Sources: European Commission - February 2023

2 CECE ANNUAL ECONOMIC REPORT March 2023

CONSTRUCTION INDUSTRY

Construction activity
in Europe is set to stagnate
this year and next
During the past six months there have Production in the construction sector 2015=100, seasonally adjusted
been significant changes in Europe that series
have impacted on the economic envi- 120

ronment for construction. This includes Euro area UE

the war in Ukraine and the anxiety it has

caused across the region. Also, policy 105

changes by central banks, including steep

rises in interest rates, alongside the tight-
ening of credit. Finally, problems with the 90

availability and cost of construction prod-

ucts have all had a negative impact on the
construction sector in 2022, with much of 75
1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10
the impact being attributable to the hous-
2015 2016 2017 2018 2019 2020 2021 2022
ing sector, both new build and renovation.
The era of low interest rates within Eu-
rope has ended, and higher interest rates
and a weaker economy are making home estimates published so far are posi-
buyers and businesses more reluctant tive. According to Eurofer, construction CONSTRUCTION ORDER
to invest in new residential and non- output in the third quarter last year in BOOKS ARE STILL WELL-
residential buildings. In addition, rising the EU increased by 2%, following an
costs for building materials have made increase of 6.5% in the second quar- FILLED
new investments more expensive, al- ter, both year on year. This was despite
though prices for some building materials the continued rise in costs and increas- The order books for EU construction
have fallen in recent months. Residential ing levels of economic uncertainty. firms are still well filled with 9 months
sales have slowed down, consumer con- of work identified at the beginning of
fidence has plummeted and there is now According to Eurostat, in the euro area 2023. The confidence indicator for EU
oversupply of housing in many countries. in November 2022, compared with No- construction declined in the first half
vember 2021, civil engineering output of 2022, but since then has hovered
As a result, the outlook for growth in new increased by 1.7% and building con- around a neutral position. This suggests
residential construction has deteriorated. struction by 1.2%. In the EU, civil en- that developments are positive in some
The outlook is not much brighter when gineering output increased by 2.8% subsectors. High energy prices are creat-
considering the situation in other sectors and building construction by 1.6%. ing additional demand for energy-saving
within the construction industry. How- construction work in both the new build
ever, civil engineering is emerging as the Among Member States for which data is and repair and maintenance markets.
most positive sector, with many coun- available, the highest annual increases in
tries investing in low-carbon energy and construction output in 2022 were seen in
renovation of the existing infrastructure. Slovenia (+44.0%), Romania (+20.4%) and A DIFFICULT PERIOD OF
Belgium (+12.9%). In contrast, the largest ADJUSTMENT FOR THE
AT LEAST 3% GROWTH IN
decreases were recorded in Spain (-6.9%), INDUSTRY, BEFORE A
Slovakia (-5.8%) and Germany (-1.2%).
CONSTRUCTION OUTPUT According to the European Commis- RETURN TO GROWTH IN 2024
IN 2022 sion’s latest report, construction output
in the EU in October and November grew According to Euroconstruct, two diffi-
by an average of 0.7% compared with cult years can be expected for the con-
Not all data is available yet for construc- the previous quarter, following declines struction sector across Europe, with
tion activity in 2022 in Europe, but the in both the second and third quarters. growth forecast at just 0.2% in 2023

March 2023 CECE ANNUAL ECONOMIC REPORT 3

and 0% in 2024. A return to growth
in output looks unlikely before 2025. GDP vs. Construction Output
y-o-y change, in %
8
Construction output in the EU should 6
continue to increase during 2023, but at 4

a very moderate pace. The wider slow- 2

0
down in economic activity due to the on-
-2
going war in Ukraine is also expected to
-4
impact on the construction sector, with
-6
falling output expected between the
-8
fourth quarter of 2022 and the second 2019 2020 2021 2022 2023 2024 2025
quarter of 2023. The civil engineering sec- GDP, real Construction Output
tor looks positive, but other sectors are
expected to record declines in activity.

DIFFERENT PAST AND are different for public works, but a real in Germany is gloomy. The impact of high-
FUTURE PERFORMANCES IN question mark remains on the imple- er construction costs, labour market con-
mentation of work subsidized by the Na- straints, and a challenging financial en-
THE MAJOR MARKETS tional plan, and on the ability of admin- vironment for the industry will continue
istrations and companies to meet the to weigh heavily on the market in 2023.
objectives expected by the European Un- The impact will be most pronounced in
Italy was the strongest market in Eu- ion. The challenges concern not only the the residential building sector. However,
rope in 2021, with a growth in output design and execution of work, but also a substantial pipeline of infrastructure
at 12.1%, driven in part by EU subsidies. the procurement and cost of materials. projects will offset the wider cyclical de-
Following this, 2022 was an exceptional cline in construction activity. This is partly
year for the construction sector in Italy The UK is currently one of the worst- due to efforts to diversify Germany’s en-
with activity levels reaching close to the performing economies in Europe. Ac- ergy supply following Russia’s invasion of
peak levels achieved in 2007. The con- cording to the Construction Products Ukraine. The political reaction to Russia’s
struction market has benefitted from Association (CPA), construction output invasion of Ukraine has prompted activ-
significant private resources, such as is expected to fall by 4.7% in 2023 be- ity to diversify Germany’s energy imports
the savings accumulated by households fore recovering slowly in 2024 with away from Russia, particularly via the
and businesses in both 2020 and 2021. growth of 0.6%. Output in the private construction of the market’s first lique-
housing sector is forecast to decline by fied natural gas (LNG) import terminals.
Alongside this, substantial public re- 11.0% in 2023, as housebuilders focus Finally, the credit rating agency Fitch are
sources, (tax incentives such as Super- more on completing existing develop- forecasting that Germany’s construction
bonus as well as National recovery plan ments rather than starting new projects. industry will grow by a moderate 1.2%
funds) have also supported activity. How- in 2023, after a surprising downturn in
ever, in 2023, a turnaround is expected. This fall in activity is primarily due to ris- construction output of 2.3% in 2022.
In addition to soaring prices within the ing mortgage rates, falling real wages
sector, 2022 construction will cost 15 to and poor consumer confidence. In addi- The construction market in Spain is ex-
20% more than in 2019 according to of- tion, government policy is less support- pected to outperform the Eurozone av-
ficial sources and inflation has also be- ive for house building, with the ending of erage in 2023. Euroconstruct expect the
gun to affect house prices and demand the Help to Buy scheme, the Residential construction sector to grow by almost
levels. 2023 will be a transitional year, Property Developer Tax and the Building 3% in 2023, after showing growth in
marked by a general slowdown, but Safety Levy. In contrast, infrastructure output above 12% in 2022. In 2024 and
overall growth in output is expected to continues to go from strength to strength, 2025 growth in the sector is expected to
remain positive at 0.9%. This reflects a reaching historically high levels in 2022 ease back to 2% for both years. The im-
range of mixed performances across the as it benefitted from multi-billion pound plementation of the Recovery and Resil-
sectors ranging from -9% for residential projects such as HS2, the Thames Tide- ience Plan is set to boost growth in in-
repair and maintenance, to +41.7% for way Tunnel and Hinkley Point C, as well vestment, especially in the construction
new public works. From 2024, the mar- as long-term frameworks activity in sub- sector. However, the residential sector
ket is forecast to slow down significantly. sectors such as rail, roads and energy. in Spain is expected to show a decline
in activity due to a combination of high-
Total investment is forecast to decline Looking ahead, further growth in infra- er interest rates and lower disposable
by 7.1%, and residential repair and structure is expected but it is likely to household incomes having a negative im-
maintenance is expected to decline by be slower than in previous years due pact on access to affordable mortgages.
22.6%. Incentive schemes have been to inflation and financial constraints.
the main driver for construction work Construction output in France increased
but are set to be reduced. Expectations The outlook for the construction market by 3% for civil engineering and by 10% for

4 CECE ANNUAL ECONOMIC REPORT March 2023

building work in 2022. However, the price
effect is significant within these statistics. Total construction performance in the EUROCONSTRUCT - 19 area
With price increases of around 6% to 7% 110
Index 2022 = 100 (in real terms)
in 2022, building activity measured in vol- 105
ume terms only increased by 3.7%, and 100
civil engineering fell by 4%. The outlook 95

for construction activity in 2023 is sub- 90

dued due to low economic growth of 0.1% 85

and elevated inflation and high interest 80

75
rates. Higher prices for construction mate-
70
rials and higher wage levels, together with 2019 2020 2021 2022 2023 2024 2025
tighter environmental standards, impact
France Germany Italy Spain United Kingdom
significantly on building costs. In addition,
supply chain issues for some materials are
still causing delays on construction work.

March 2023 CECE ANNUAL ECONOMIC REPORT 5

 XTR
A
F A
RENTAL MARKET TUR

Slowdown, but positivity

remains
The ERA/IRN RentalTracker for the fourth quarter of 2022 confirms the faltering confidence in Europe that was
first hinted at in the June 2022 survey, but there is no collapse in sentiment.

There remains a positive balance of opin-

ion on current business conditions in Eu-
rope, but only just. More than 100 rental
companies responded to the ERA/IRN
RentalTracker survey at the end of 2022
and first week of January, with 28% re-
porting improving conditions against 17%
seeing deteriorating conditions – a positive
balance of 11%.

That positive result is good, although it is

the lowest figure since the Q3 2020 survey,
which was undertaken in the middle of a
global health crisis that you don’t need to
be reminded of.

The fact that 72% of respondents are ei- rental companies all the equipment they The positive finding on utilisation follows
ther seeing no change to conditions (56%) wanted in 2022. similar results in all the surveys undertaken
or worsening (17%) may not seem terribly since the first quarter of 2021, when the
positive, but given the Ukraine war, rising Time utilisation on fleet remains strong, recovery from Covid was in full flight.
interest rates and global GDP slowdown, according to the survey, with a tiny num-
it may actually be a much more positive ber – less than 3% - reporting lower utili- EMPLOYING MORE?
result than we could have expected. sation and around 45% seeing continued
improvements. Around half reported no Regional What about employment inten-
It is true that there is a gentle deteriora- change. Again, this may reflect an ‘arti- tions? The desire to adds staff has been
tion across all the measures – business ficial’ choke on fleet growth caused by a feature of all the RentalTracker surveys
volumes, fleet utilisation, capital expendi- supply constraints. since the start of 2021 and that remains
ture plans, employment intentions – but in
each case there remains a positive balance
of opinion.

CAPITAL INVESTMENT
At the end of June 2022, more than 50%
of respondents were expecting to increase
their capital investment in fleet in 2023.
By the end of the year, that had fallen to
nearer 40%: meaning that the clear ma-
jority will stick to 2022 levels of spending
or reduce it.

Even so, more will still increase spending

than will reduce it, which is an encour-
aging sign and reflective, perhaps, of a
supply chain that has struggled to give

6 CECE ANNUAL ECONOMIC REPORT March 2023

 difficult to be certain about these national
trends because the sample sizes for indi-
vidual countries tend to be relatively small,
which is inevitable given the total number
of responses of 102.

That said, the good response from French

companies only allows us, unfortunately,
to report that the country seems to be the
least buoyant of all European nations. It
is bottom of all the tables on these pages
in terms of intentions to invest, business
activity, utilisation trends, and business
levels in the final quarter of 2022. Only
in employment intentions does it come
off the bottom place, replaced by the UK.

the case in this latest survey in Q4. Only business will be in 12 months’ time also re- However, most notable is the fact just 4%
one out of the +100 respondents was ex- sults in a positive balance of opinion: 40% of respondents in France reported improv-
pecting to reduce their workforce in the expect business to be better, 45% expect it ing business conditions at the end of 2022.
first quarter of 2023, and there was an to be the same, and less than 15% expect That finding is in agreement with a recent
even split among the rest about whether it to be worse. That positive balance of DLR association survey which reported
they would add or maintain current staff- 26% is slightly better than Q2 2022, but deteriorating confidence.
ing levels. significantly lower than in 2021. It seems
The UK is also below average on most
counts, although it is not so much the
levels of confidence that catch the eye –
50% will still increase spending and 60%
reported a better 2022 Q4 year-on-year –
but the deterioration since the Q2 survey
last year.

In as far as it is possible to say, the Benelux,

Germany and Spain are the nations that
seem to be most positive about business
conditions. Spain continues to recover
from a difficult period, and Germany’s
rental sector has performed well for sev-
eral years.

Although there may be a tendency to

view the Q4 results negatively – because
that is the overall direction of travel - it is
The employment question comes with that Europe’s rental sector is hopeful that worth remembering that the balance of
a complicated backdrop – changing em- the energy crisis will be over the worse and opinion on all the measured categories
ployment patterns post-Covid; an ageing that the forecast global recession will be remain positive.
workforce; and shortages in skilled me- shallow and not prolonged.
chanics. Generally, the equipment rental That illustrates the resilience of the rental
sector is struggling to attract new people market, which seems to be real rather
to the industry, and that is reflected in the NATIONAL DIFFERENCES? than imagined.
large number of companies still looking Source: KHL, European Rental Association ERA.
to expand recruitment even as the wider The tables give an indication on how busi- Rental Tracker is jointly organised by Interna-
economy flattens. Expectations for how ness sentiment varies around Europe. It is tional Rental News (IRN) and ERA.

March 2023 CECE ANNUAL ECONOMIC REPORT 7

GLOBAL MINING INDUSTRY

Shipments of surface mining

equipment showed further
strong growth in 2022
Exploration and drilling activity in the global mining market continued to show growth in 2022. Exploration
budgets for the major global mining companies exceeded 2021 and 2020 levels, and in fact were the highest
since 2013. Over 80% of spending was on exploration of gold and base metals. Drilling activity was also strong
in 2022, matching 2021 levels, which were also higher than 2020 and 2021 levels.

T
he Parker Bay Company deliveries
of surface mining equipment to the
global mining market on a quarterly
basis. Their latest update for Q4 2022 is
shown in the graph below and shows how
shipments have continued on an upward
trend since the second half of 2020.

In Q4, shipments of equipment were

over 1,500 units from the manufactur-
ers who provide data and represented
a 19% increase on Q3 levels. In value
terms, this represented $2.3 billion and a
15% increase on Q3 levels. For 2022 as a
whole, shipments of equipment reached
just under 5,300 units – an increase of
26% on the previous year and was the for over 60% of the machine population ronmental issues due to climate change.
highest level since 2013. In value terms, with over 55,000 in use at the end of This often refers to the so called ESG
shipments in 2022 reached $8.6 billion 2022. Four equipment types account for agenda, involving environmental, social
representing a 23% increase on 2021 over 90% of the machine population and and governance issues.
levels. include dozers (over 15,000 machines),
hydraulic shovels/excavators (over 5,000 As world supply chains look to meet ris-
Parker Bay operate a mining equipment machines) and wheeled loaders (over ing demand, this opens up opportunities
database which includes eight different 4,000 machines). and needs for the global mining industry
types of surface mining equipment. Their to deliver the materials that the world
latest assessment of the machine popu- In the past, prospects for the global min- needs. As a result, many are taking the
lation suggests more than 89,000 pieces ing industry have usually been assessed view that short and medium term pros-
of equipment were active in the global on the basis of commodity prices, par- pects for the global mining sector are
mining market at the end of 2022. ticularly base metals prices. In a changing encouraging.
and more uncertain world, experts are
Mining trucks are estimated to account now talking about the impact of envi-

8 CECE ANNUAL ECONOMIC REPORT March 2023

EQUIPMENT MARKET

European construction
equipment industry
defies the odds
In a very challenging economic and geopolitical environment, the European construction equipment market
defied the odds in 2022. Sales in the European market almost reached the same level as the previous year,
and only saw a minimal 0.6% decline. This provides a clear indication of the robust demand for equipment in
Europe, as without the ongoing supply chain disruptions, the market would have seen another year of growth.

T
aking on board the economic original 12 m rolling avg
fallout from Russia’s aggression
300
against Ukraine, the European
market situation looks even more posi-
250
tive. Sales in Europe excluding Russia
– where the market declined by 37% as 200
a result of Western sanctions – went up
by almost 3% in 2022. 150

Regional differences were not a sig- 100

nificant feature in 2022, as most
of the major markets saw very mi- 50
nor rates of growth or decline.
0
2007 2010 2013 2016 2019 2022
However, Southern Europe was a notable
exception with 12% growth in equipment
sales. Turkey and Russia were the posi-
Monthly construction equipment sales in Europe (index 2010=100)
tive and negative exceptions, with close
to 40% growth and decline, respectively.
Equipment sub-segments also saw simi-
lar levels of growth. Road machinery saw sales as the year advanced, while the Sales of heavy equipment (-1%) per-
a minimal sales increase of 1%, sales of momentum slowed down for road formed slightly better than the compact
tower cranes were flat and concrete ma- equipment and hydraulic attachments. segment (-2%), albeit the differences
chinery and earthmoving equipment re- . are minimal. Within the compact seg-
corded minor declines of 1% and 2%, re- EARTHMOVING EQUIPMENT ment, sales growth was limited to mini
spectively. Light and compact machines excavators (+4%), while all other prod-
(-0.5%) performed slightly better than Sales of earthmoving equipment in Eu- ucts saw different rates of decline. Sales
the heavy machinery segment (-2%). rope showed a moderate decline of of skid-steer loaders went down by 9%,
As supply chain disruptions became 2% in 2022. After the first quarter had compact wheel loaders saw a decline
less severe during the course of seen minimal growth, a combination of 12%, and sales of backhoe loaders
2022, machine availability improved of supply chain disruptions and eco- fell by 19%. However, the latter is solely
in the second half of the year. How- nomic fallout from the Ukraine war re- attributable to the situation in the Rus-
ever, the trends were different for sulted in the market declining by 8% and sian market as sales of backhoe loaders
some sub-sectors and market regions. 6% in Q2 and Q3, respectively. In the in Europe went up if Russia is excluded.
fourth quarter, due to an improved abil- In the heavy equipment segment,
Earthmoving equipment, concrete ma- ity to build and deliver machines, sales wheeled excavators (+3%), crawler exca-
chinery, and tower cranes saw higher were up by 1.5% compared with 2021. vators (+1%) and wheel loaders (+1%) all

March 2023 CECE ANNUAL ECONOMIC REPORT 9

saw modest growth in sales. Motor grad-
ers (-4%), ADTs (-7%), and rigid haulers
(-8%) recorded moderate declines, while compact earthmoving
dozers saw a significant downturn of 20%.
light compaction
From a regional perspective, the largest
market Germany saw a small decline in concrete vibration
sales of 4%. The UK market maintained its
light equipment
position as the second rank, despite a sim-
ilar decline in sales of 4%. Following sig- heavy earthmoving
nificant growth of 16%, the Italian market
surpassed France (where sales were up by road machinery
3%) to become the new number three in
Europe. Overall, Southern Europe was the concrete machinery
best-performing market region (+14%),
heavy equipment
primarily because Spain (+15%) record-
ed double-digit growth alongside Italy. -10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% 1% 2%

For most of 2022, CEE markets saw double-

digit growth rates. However, a very weak
2022 sales development of light and heavy equipment
fourth quarter pushed the level of sales
back to 0%. Nordic markets (+1%) were
also virtually unchanged, as were the Bal-
kan markets (-1%). Austria and Switzerland The light compaction segment showed a ers (-26%) and PTRs (-44%). Finally, sales
(-6%) and Benelux markets (-9%) experi- 2% growth in sales in 2022, with an ex- of asphalt pavers fell by 14% in 2022.
enced modest downturns in sales. Turkey panding vibratory plates market (+3%),
(+40%) and Russia (-33%) saw the positive but also a flat tampers market. Sales of Looking at the regional markets, the lead-
and negative extremes in levels of sales. pedestrian rollers dropped significantly ing market Germany impressed once
by 29% last year, but the impact on over- more, as sales grew by another 2% from
ROAD EQUIPMENT all sales is limited due to low volumes the exceptional levels seen in 2021.
of this product. The heavy compaction France, European’s second largest mar-
Sales of road machinery in Europe have segment saw a 6% decline in sales be- ket, saw almost flat sales at -1%, while
been exceptional for the last couple of cause the two large-volume products the UK saw a small decline of 4%. Sales in
years. They have been fuelled by in- single-drum rollers and tandem rollers the CEE markets increased by 7% in 2022,
frastructure investments from stimu- recorded exactly this level of decline. which helped this region to surpass the
lus programmes, and the market even Nordic markets (0%) in unit sales terms.
continued to show growth in the first The strong sales of trench rollers (+13%)
phase of the pandemic, with sales did not have any noticeable impact be- Some of the other markets saw surpris-
reaching record highs in both 2020 and cause they were offset by substantial ingly robust growth. The Benelux mar-
2021. 2022 did not disappoint either, declines of other products like combi roll- ket and Austria/Switzerland saw sales
as sales grew further by another 1%.

This positive performance was main-

Others
ly due to solid growth in sales in the Germany
22%
first quarter. Following this, Q2 and 23%
Q3 saw fairly flat sales and were then
followed by a 10% fall in Q4, com-
pared with the previous year’s sales. Belgium
3%
This pattern of sales was the opposite to Austria
3%
what was seen in the earthmoving seg-
Netherlands France
ment, where there had been a growing 3% 13%
momentum towards the end of the year Poland
due to improved machine availability. 3%
Sweden
This was largely due to higher sales 4% Russia
Italy UK
of light compaction equipment which 4%
9% 13%
were less prone to supply chain disrup-
tions than the other product segments. Shares of construction equipment sales in European countries, 2022

10 CECE ANNUAL ECONOMIC REPORT March 2023

increase by 18%. In contrast, South- Q1 2022 Q2 2022 Q3 2022 Q4 2022
ern Europe didn’t meet expectations 30%
and growth in sales was limited to a
25%
mere 2%. The Turkish market grew by
22% but remains at very low absolute 20%
volumes compared with other market 15%
regions. Not surprisingly, the Russian
10%
market saw a sharp fall in sales of 49%.
5%
CONCRETE EQUIPMENT 0%

-5%
Sales of concrete machinery on the Euro-
pean market were at very similar levels to -10%
2021 last year and only saw a minimal de- -15%
cline of 0.7%. The first half of the year was
rather weak with sales declining by 3% -20%
Germany France UK CEE Italy
and 11% in Q1 and Q2, respectively. How-
ever, the second half brought a return to
growth, with a flat third quarter followed Construction equipment sales in major European markets compared to previous year in %
by a 15% increase in sales in Q4. This was
most likely the result of improved avail-
ability to build and deliver machines. TOWER CRANES sales. The German market could not main-
tain the high level of sales seen in 2021
In the light segment, concrete vibration
equipment saw a 9% decline in sales. Sales of tower cranes in Europe were and ended up with an 11% decline. Italy
Heavy machinery performed better almost flat (-0.4%) in 2022, but similar (+14%) saw double-digit growth in sales,
(+0.1%) but showed diverging product to concrete machinery, saw momen- as did the Russian market (+12%), but not
trends. Truck-mounted concrete pumps tum improving during the year. The via supply from Western manufacturers.
saw sales grow by 30%, sales of station- year began with a 6% decline in sales in Austria and Switzerland saw surprisingly
ary pumps were up by 25%, and truck the first quarter, followed by -4% and strong growth in sales in 2022 at 21%.
mixer pumps recorded a 12% increase. -1% in Q2 and Q3, respectively. In the The UK market declined by a quarter,
In contrast, sales of mixer systems went fourth quarter, improved machine avail- Benelux markets saw a 14% fall in sales,
down by 4%, the largest-volume product, ability led to double-digit growth of 11%. and Nordic markets went down by 17%.
truck mixers, saw an 8% decline in sales, Sales of saddle-jib cranes in Europe in-
and batching plant sales dropped sharply creased by 2% last year, while luffing-
SUMMARY AND OUTLOOK
by 39%. This is not a significant concern, boom cranes saw sales decline by a third.
as the high rates of fluctuation in sales
for this product are primarily a result Looking at the market regions in Europe in Against a backdrop of economic and
of very low volumes (in 2021, batching order of descending volume, the largest geopolitical uncertainties, a stable 2022
plants sales increased by more than 30%). market France saw another 13% growth in market performance can be seen as a

Looking at the major markets, Germany

saw a moderate fall in sales of 6% and Q1 2022 Q2 2022 Q3 2022 Q4 2022
the French market declined by 17%. 90%
The Italian market saw a decline of 11% 80%
in sales, but comfortably remains the 70%
60%
no. 3 market in Europe. In contrast,
50%
some of the smaller markets saw sig-
40%
nificant increases in sales last year. T
30%
20%
his includes Turkey, where sales went up 10%
by almost two thirds. CEE markets grew 0%
moderately by 8%, while Nordic markets -10%
(+21%) and Benelux (+20%) saw strong -20%
growth. Austria and Switzerland recorded -30%
minimal increases in sales of 2%. Declines -40%
on the Russian market were moderate -50%
last year at -18%, with the market being Nordic Benelux Russia Spain Turkey

primarily supplied with exports from Asia.

Construction equipment sales in major European markets compared to previous year in %

March 2023 CECE ANNUAL ECONOMIC REPORT 11

 Q1 2022 Q2 2022 Q3 2022 Q4 2022 months. This confirms that at least the
20% first half of 2023 is “safe” when it comes
to capacity utilization and sales scenarios.
15%

However, the second half of the year

10%
might bring about a more challenging
scenario. Higher interest rates due to
5%
ongoing inflation in Europe impact sig-
0% nificantly on the outlook for the building
construction industry, particularly the
-5% residential sector. This can be expected
to impact on sales of equipment that
-10% are used in the residential sector. Simi-
larly, the gardening and landscaping sec-
-15% tor will probably see weaker demand
Earthmoving Road Concrete Tower Hydraulic after many years of booming sales. In
equipment equipment equipment cranes attachments
contrast, civil engineering, will probably
still benefit from public investment pro-
Product groups: construction equipment sales in Europe compared to previous year in % grammes in many European countries.
Based on the assumption that the
geopolitical scenario does not de-
favourable outcome that surpassed ex- Latin America as the best prospects. teriorate this year, a soft landing on
pectations. The resilience of the construc- Within Europe, ambitions focus on Ger- the European market with a single-
tion equipment industry is noteworthy, many, France, and CEE markets as the digit sales decline seems realistic.
compared with many other industries. It best opportunities. Not surprisingly,
is supported by a stable business situation the Russian market is still bottom of However, this does not necessar-
in most customer sectors, but neverthe- the list in terms of market expectations. ily mean that European equipment
less is surrounded by a toxic mix of infla-
tion, ongoing supply chain disruptions,
and concerns about the world economy. 100
This underlying stability is reflected by 80
robust industry sentiment. The climate 60
index in CECE’s Business Barometer sur- 40
vey went down moderately over the year 20
as the economic fallout of the war in 0
Ukraine unfolded, but then bounced back -20
in November after the bauma exhibition. -40
-60
At the beginning of 2023, a majority of -80
companies are reporting a positive busi- -100
Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 Feb-23
ness situation and have positive expecta-
tions about the short-term future. In the Business Index Current Business Stuation Future Expectations
February survey, earthmoving equipment
manufacturers were again the most opti-
mistic group with six out of ten companies European business climate index, CECE Barometer February 2023
surveyed anticipating growing business.

The positive responses out-

numbered the negative ones Order backlogs within the industry have manufacturers will face declining
for all of the product segments. reduced thanks to slightly better availabil- turnover, as prospects for exports
When looking at expectations for busi- ity to build and deliver machines. How- – most notably in North America,
ness by region, manufacturers regard ever, 60% of European manufacturers are and also Latin America and the Mid-
North America and, to a lesser extent, still reporting a backlog of more than four dle East markets – remain positive.

12 CECE ANNUAL ECONOMIC REPORT March 2023

SNAPSHOT

The global construction

equipment market
Following the peak reached in the global and saw stronger than expected sales in than 300,000 machines were sold. From
construction equipment market in 2020 2022, reaching 200,000 units. However, 2023, a recovery path is expected until
and 2021, lower levels of sales are fore- supply chain constraints are continuing 2026, but sales are not expected to be
cast for the next two years. The market to hold back sales, and a soft landing is anywhere near the peak reached in 2021
recovery following Covid and the impact forecast for 2023-2025. In terms of the when around 475,000 machines were sold.
of low interest rates drove annual sales major equipment types, the market con-
to record levels of more than 1.2 million tinues to be dominated by mini excava- Finally, Off-Highway Research have fo-
units. This is what Chris Sleight - man- tors, followed by crawler excavators, cused on the South African market,
aging director at Off-Highway Research telescopic handlers, wheeled excava- which is traditionally characterized by
- presented at the CECE Economic Fo- tors, skid-steers and backhoe loaders. a strong mining sector (especially coal,
rum at Chamonix in January this year. gold and diamonds), which is supported
The North American market continued by rental fleets within the country. The
This was part of the 2023 CECE Con- on a growth path in 2022 with a strong market was subdued in the late 2010s,
gress hosted by Evolis, the French na- rebound in sales to more than 300,000 and had a very soft rebound post-Covid
tional association. The lower levels of machines. A modest decline is expected due to the weakness of the contractors
sales being experienced after the peak in 2023-2024, when the level of sales and rental companies. These are the big-
are not a result of lower demand. This will probably fall to around 280,000 units gest customers within the region and the
is remaining strong, but it is being tem- per year. In terms of the major drivers market had to adjust to the lower levels
pered by high inflation and high inter- of the market, residential construction of demand than experienced previously.
est rates, alongside supply chain con- stimulated the sales of compact ma-
straints and shipping and logistics issues. chines (especially tracked loaders), and However, the mining industries provide a
infrastructure and public spending pro- core source for demand within the mar-
An interesting feature of the global vided demand for heavier equipment. ket, with sales of large dump trucks and
market in 2022 was the changing mar- backhoe loaders remaining as the highest
ket shares of some of the major play- However, despite an uncertain eco- volume products. At present, the con-
ers. Most significant was the 40% re- nomic outlook, especially from an in- struction equipment market in Southern
duction in the level of sales in China, ternational perspective, investment Africa is facing some significant challeng-
which was overtaken by North America rates in construction and infrastruc- es. High inflation, shortages of raw materi-
to become the leading global market ture are continuing to act as a driver for als and high transportation are impacting
with sales above 300,000 machines. the construction equipment market. the market alongside irregular procure-
ment practices and criminal influences.
Sales in the European market have been The Chinese market experienced a severe However, despite this, the re-
on a growth path since 2013 (apart decline in 2022 when the market recorded gion continues to be a key destina-
from the decline experienced in 2020), a loss of 40% on the previous year and less tion for construction equipment.

March 2023 CECE ANNUAL ECONOMIC REPORT 13

EUROPEAN MARKETS

National perspectives
by CECE members
The national CECE member associations shed more light on regional developments in the European construc-
tion equipment sector, describing main drivers of growth and forecasting the year 2023.

Country How did the market What were the main What is the forecast
develop in 2022? drivers? for 2023?
Belgium Earthmoving and construction Earthmoving and construction Earthmoving and construction equip-
equipment equipment ment

- Invoices >10Ton; - The scarce availability of ma- The decrease will not be dramatic in
close to 2021 results chines in Belgium, combined with 2023 due to the spreading of deliv-
- Invoices <10T : -6% massive orders in 2021, created eries of 2022 orders and the huge
- Order intakes >10T : 3% (July) a bottleneck. These delivery Oosterweel project guaranteeing work
- Order intakes : <10T : 50% problems seem to be resolving for for years.
(July) a few months now. Decreases in
orders are being offset by deliver- Source : Sigma
ies of older orders, flattening the (Equipment Representatives for Public
decrease curb. and Private Works, Building and Han-
- The order books for infrastruc- dling).
ture works are still booming.
Thanks to some major projects, of
which Oosterweel is a long term
infrastructure project supported
by the government.
- Private estate development is
struggling.
- The lack of resources (mainly
technicians) is worsening and has
a severe impact on the activity.

Finland - Equipment import increased - Main drivers in construction - Construction will decrease by 2 %
by 7 % and export increased by were building projects from - Rental markets will decrease by 2 %
12 % previous years and high level of
- Rental markets estimated to housing and facility construction
have increased by 8 % - Repair construction will increase
- Construction increased by 2 % next year
- High inflation with high inter-
est rates will limit construction
projects
France - Sales growth in the first quar- - Rental companies back to the - Around -5% forecasted in 2023
ter, weak market in the spring market
and during the summer, dynam- - Market determined by produc-
ic in the fourth quarter tion capacity of factories
- Stable market in 2022 - Problem of delivery of parts and
In detail : components less strong
- 4% drop for heavy earthmov- - But a year 2022 marked by a
, ing equipment, sharp increase in prices
- 1.5% increase for compact l k
k equipment,
- -1% for road equipment and
--12.5% for concrete equipment

14 CECE ANNUAL ECONOMIC REPORT March 2023

Country How did the market What were the main What is the forecast
develop in 2022? drivers? for 2023?
Germany - Construction equipment sales - All customer segments had a - Sales on the German market are
were flat compared to previous robust development in 2022 expected to decline by approx. 5%
year - Once more, machine availability - Industry turnover from German
- All-time record high of 2021 was the limiting factor for sales production could still grow thanks to
was confirmed - Sector proved very resilient de- good export business
- Light and compact equipment spite much higher input costs
had minimal growth while - In 2023, residential construction
heavy machinery saw small will be weaker because of high
declines interest rates
Italy - Construction equipment sales - Positive expectations - Sales volume: +6%
up 18% by product line: - Road works
- Earthmoving machines sales - Civil works
up 19% - Safety and 4.0 capital goods
- Road equipment sales de- incentives
crease -10%
The Netherlands - Slowdown after significant in- - The challenges with Nitrogen - 2% economic growth expected in NL
crease of total market demand deposits legislation is still pending - The purchase indicators show there
last 4-5 years but the attention to take construc- is still appetite by customers in NL to
- Strong: mid-size rental, mate- tive actions is moved a bit forward purchase machines
rial handling, waste handling, to come first to final conclusions. - Stable demand for raw materials re-
demolition, civil Too early to estimate how it will lated to the construction industry and
- Equal: Landscaping, gardening influence the construction sector. strong demand in material handling of
- Weak: compact rental - Strong demand for Zero Emis- coal by several industrial port material
sion machines. handling companies
- Structural growth potential in hous-
ing due to shortage in this sector
Norway - 1,5% growth in sales quantity - Commissioning of public con- - The market has cooled, and from
- Largest growth for excavators struction projects. Infrastructure October 22 there has been lower re-
- Turnover growth in members road and rail quests for new machinery
company with 5,6% - The private marked for home and - Rental market is increasing, contrac-
- Delivery times shorten, and cottage has fallen dramatically and tors hesitates to own new machinery
several have machines on stock we need this to increase. - The contractors have never been
in the beginning av 2023 more pessimistic than the last survey
- Lower request for zero emis- (November 22)
sion equipment - The member companies are pending
for signals for the second half of 2023
Spain - Construction Equipment sales - Economic Growth +5% - Sales volume +4%.
up by 4,7 % and an increase of - Activity on major infrastructure - Slight deceleration of construction
9% since 2019. projects has supported growth. market although growing by 1,8% due
- Earthmoving sales down by - Significant investments in areas to slowdown of economy (growth of
9%. such as railway, housing rehabilita- 1,6%), inflation and rise of interest
- Compaction sales up by 5% tion and development of sustain- rates.
- Despite growth of more than able cities. - We expect a growth of 6,5% in civil
5% for two consecutive years, - Actions to improve quality and engineering.
the Spanish economy is still be- reliability in the commuter rail - Big expectations on the rehabilitation
low pre-pandemic levels. service like a new rail access to market generated by the stimulus of
- Growth in construction sector the Barcelona airport, improve the “Next Generation” funds.
by 3%. electrification of the Valencia and - The investment in Spain will increase
- The situation of the war in Andalusia network, double tracks by 6,8% in civil works and engineering.
Ukraine and the increase in en- and improve level passes in Can-
ergy costs have not been partic- tabria, improve the control, com-
ularly damaging, although prob- mand and signaling subsystem in
lems in the supply chain and Madrid and Asturias. Also import-
inflation in raw materials have ant investments in the Atlantic
caused some problems. and Mediterranean Corridors and
improvement in Madrid north.

March 2023 CECE ANNUAL ECONOMIC REPORT 15

Country How did the market What were the main What is the forecast
develop in 2022? drivers? for 2023?
Sweden - Large back-log of orders - Continued materials shortages, - Still strong but somewhat reduced
- Still relatively strong new but improving from 2022 levels
orders - Long lead times, but improving - Decline expected, mainly due to
- Good financial year - Decreasing demand from con- weakening construction sector
- Still materials shortages struction sector, still sufficient
- Increased demand for low-emis-
sion/ electric products
- Strong mining sector
- Large share of exports
Turkey January-November export fig- - Our important position in the The concepts of green transformation,
ures increased from 1.598 mil- supply chain electrification, digitalization and shar-
lion USD to 1.780 million USD. - Maintaining the vitality of do- ing economy are becoming more effec-
This means a growth of 11.4% mestic demand on a sectoral basis tive and common in our industry and
compared to 2021. - The significant increase in de- a size change between +10% / -10%
In addition, when we look at mand in foreign markets is also is predicted in Turkish construction
the January-November figures, effective equipment market for 2023.
the ratio of exports to imports is
110.6%.
UK - Sales of construction and - Construction output grew by - Construction output is forecast to de-
earthmoving equipment grew 5.6% in 2022. Strongest growth cline by 4.7% in 2023. A weak housing
by just under 3% in 2022 was in the first quarter and activ- sector is expected to be the main drag
- Growth in sales was in the sec- ity was fairly flat for the rest of the on activity. Infrastructure is forecast to
ond half of the year, particularly year, with supply chain constraints show further growth.
Q4, when the impact of supply being a factor. - Sales of equipment are expected to
chain constraints began to ease. - Strongest growth was in the in- decline by 7% in 2023, reflecting lower
- Equipment sales in 2022 ex- frastructure sector, which is al- levels of construction activity. Sales in
ceeded the peak levels reached ready at historically high levels of the early part of the year may benefit
in 2021, and were the high- activity. This sector has benefitted from delayed demand from 2022 due
est since before the “financial from multi-billion pound projects to supply chain constraints limiting
crash” in 2008 such as HS2, the Thames Tideway machine manufacturing activity and
Tunnel and Hinkley Point C. supply.

16 CECE ANNUAL ECONOMIC REPORT March 2023

CECE REPORTING TEAM

Contributors
Take a moment to get to know our CECE reporting Team. Below we list the contributors to this publication.

SEBASTIAN POPP
Deputy Managing Director, VDMA
Construction Equipment and Building Mate-
rial Machinery

Sebastian contributes to the publication by

providing the text for the Equipment Market
chapter, covering tower cranes, earth-
moving, road and concrete equipment. Se-
bastian is also involved in the drafting phase
of the script of the report’s animated movie.

ROMA GUZIAK CORRADO SERRENTINO

Communications Manager, CECE Communication & Public Affairs Manager,
UNACEA
Roma keeps the publication in order by
managing deadlines and laying out the Corrado contributes to the report by drafting
publication into a publishable version, once the Snapshots. These chapters change from
all chapters have been drafted. In addition, year to year, in order to cover the most
together with Riccardo, she coordinates the relevant topics for the industry at a given
production of the report’s animated movie. moment in time. The topics range from
areas like exhibitions and trade fairs, to ma-
jor investments and CECE Economic Forums.

RUDOLPH GANZEL
Director of Economic Affairs, EVOLIS

Rudolph is responsible for drafting the

Macroeconomic View which provides
insights into the economy of the euro zone.
He also contributes to the publication by
drafting the Construction Industry chapter,
covering the construction sector by country.

PAUL LYONS RICCARDO VIAGGI

Market Information Manager, CEA Secretary General, CECE

Paul, apart from being one of the contribu- Riccardo is the head of the organisation, and
tors of the report by drafting the Global oversees the whole publication. He is also
Mining Industry chapter, is also responsible involved in providing input into the report by
for the proof-reading of the entire text. writing the opening statement and draft-
Being a native English speaker, this task was ing the rental industry chapter. In addition,
entrusted to him. Thanks to Paul no linguistic together with Roma, he coordinates the
bloopers sneak into our report. production of the report’s animated movie.

March 2023 CECE ANNUAL ECONOMIC REPORT 17

18 CECE ANNUAL ECONOMIC REPORT March 2023
 BluePoint

What is the WHAT WE DO The European construction equipment

industry forms an important, integral
Committee for part of the European machinery sector.
CECE is the acknowledged partner of the
European Construction institutions of the European Union for Manufacturers are predominantly small
equipment? all questions related to the construction and medium-sized companies but also
equipment industry. Based in Brussels, large European and multinational compa-
CECE represents the European construc- CECE’s work involves political represen- nies with production sites in Europe. The
tion equipment industry towards the tation and the monitoring of legisla- industry employs directly and indirectly
European Institutions, coordinating the tion and standardization on behalf of its up to 300,000 people.
views of its national member associa- member associations and their corporate
tions, and working with other organiza- members. Statistics and economic topics
tions worldwide to achieve a fair com- CECE collects a and provides up-to-date
CECE also cooperates with CEN and ISO,
petitive environment via harmonized market data for many types of construction
the European and International Com-
standards and regulations. equipment, providing a leading indicator for
mittees for Standardization. CECE fur-
thermore delivers and economic and the development of European construction
Our figures statistical services to its members and equipment markets.
partners.
- 13 COUNTRIES Since 2008 CECE runs a monthly business
Representing the interests of the trend enquiry, the CECE Barometer. The
- 1,200 COMPANIES companies taking part in the Barometer re-
industry
EMPLOYING DIRECTLY AND ceive a report about the economic situation
INDIRECTLY AROUND 300,000 New buildings and infrastructures con-
in Europe each month.
nect people, boost economies and serve
PEOPLE
people all over the globe. Construction Exhibitions
- INDUSTRY REVENUES: 40 BN € equipment manufacturers are highly
CECE gives patronage to a limited number
innovative and have invested heavily
- 20% OF THE WORLDWIDE of leading sector exhibitions, contributing
in increasing the productivity of their
PRODUCTION to successful trade fairs around the globe.
machines, while reducing their environ-
mental impact.

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1030 Brussels
Phone: +32 2 706 82 26
Fax: +32 2 706 82 10
E-mail: [email protected]
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March 2023 CECE ANNUAL ECONOMIC REPORT 19