Dr. Bernd Scherer, Managing Director of VDMA Agricultural Machinery, Source: Varnhorn
German market pushes ahead upswing in Western Europe
Particularly the German market is spearheading the recovery. Revenues from businesses with the German distributors have risen by 8 percent to 1.2 billion euros in the first two quarters. "Rising milk prices and a weak euro played into the hands of our industry since January," emphasizes Scherer. The current weakening of the dynamics of the first half of the year, "has something to do with the moderate harvest prospects we are expecting for Central and Southern Europe in the coming weeks." In Northern Europe, the farmers suffer from the rains, in the South from the drought. "Agriculture is not calculable up to the last digit. Hence, we must wait and see. However, the fundamentals continue to reflect our forecast", explains Scherer.
Eastern European markets continue upswing
Cautious optimism is also stated for France. The traditionally largest export market for agricultural machinery and tractors from Germany did not yet really come back to the road to success. "For this year, we forecast a result that will not cause any cheering, but should certainly have a stabilizing impact," says Scherer. The most significant foreign market in terms of value of the German agricultural machinery industry with an annual export volume of more than 1 billion euros accounted for a black zero in the turnover in the first half of the year.
By contrast, Russia and Ukraine continued their upward development of the last year. "Currently, Russia is performing very well", analyses Scherer. Especially tractors, soil working machinery and sowing equipment of Western production are in greater demand than rarely before. In Ukraine, the plus is even higher, namely in the clear double-digit percentage range-a trend that is likely to continue due to good harvest expectations.
VDMA expects sales growth of 4%
The VDMA business climate index, based on a representative survey of top managers of the European agricultural machinery industry, is currently ranking at the highest level for five years. Accordingly, the industry has revised its sales forecast for the current year significantly upward. For the whole year 2017, VDMA Agricultural Machinery expects a sales volume from German production of 7.5 billion euros, amounting to an increase of 4 percent.
