It seems to be the start of a change in the economic trend for the international agricultural technology markets. This is most unlikely to lead to a deep recession, however, due to the continuing high demand for mechanisation in agriculture in the emerging markets and the still predominantly good sales situation of farmers, the VDMA explained.
European agricultural machinery manufacturers achieved record sales in 2013
The European agricultural machinery industry reached a new record level in 2013 with a turnover of 30 billion euros. The manufacturers in Germany here played a central role, especially as they were able to increase production by ten percent to 8.4 billion euros. The companies in the USA, Brazil and in the Far East also experienced above-average growth. According to information from the VDMA, China´s share of production volume for agricultural machinery is now around 20 percent. Up to spring, order books at the large production sites were, in total, still at the level of the previous year. The current trend, however, is showing weaker development. The order volume of the manufacturers of agricultural machinery and tractors in Germany from January to April 2014 was ten percent below that of the previous year, whereas the sales level was still, but only just, maintained.
Heterogeneous market development within Europe
Within Europe, the market development occurring is very heterogeneous. In 2013 the two heavyweights France and Germany represented 42 percent of the agricultural technology market in the European Union. The farms and contracting firms in these countries had never before invested as much in their machinery. This year, a corresponding trend in the opposite direction has been showing itself. The French market shrank in the first quarter by around a quarter. In Germany, the order balance lasted somewhat longer, so that sales have remained stable to date. Since February, however, new orders have also shown a substantial fall.
According to the estimate of the VDMA the French market is around 15 percent below its record level from the previous year, in Germany the fall could amount to about 10 percent. Seen in a long-term comparison, however, the result achieved was still above average. There is currently a trend of growth in Spain, Great Britain and in the Scandinavian markets. Sales to Russia and to the Ukraine, the Eastern European main markets of the German agricultural machinery industry, continue to be difficult due to the trade-policy and overall political situation.
VDMA is expecting a decrease in its industry sales of around five percent to 8 billion euros. The forecast for global sales in 2014 is 93 billion euros, a decrease of four percent.
Source: VDMA
