German construction machinery manufacturers are expecting sales to drop significantly this year, after seeing record sales in 2023, according to the industry lobby group VDMA.
Soaring sales in 2023 were entirely due to a major backlog in orders that had built up during the coronavirus pandemic and supply chain bottlenecks. Sales nominally increased 11%, although the jump was a more modest 4% after adjusting for high inflation.
New orders have fallen off massively and demand appears to be plunging, manufacturers said, with percentage declines in the double-digits expected during the coming year.
The industry group is concerned about the slump in residential construction and growing competition from Chinese rivals.
Orders for building construction machinery fell by 40% last year compared to the year before, as the construction industry suffered from sharply rising construction costs and high interest rates.
Construction equipment sales are also difficult on the Chinese market, which is suffering from an ongoing real estate crisis.
"China has virtually ceased to exist as a sales market for construction machinery manufactured in Europe," said Joachim Strobel, chairman of VDMA's Construction Machinery Division. "Chinese manufacturers are increasingly pushing into the European market. There is a suspicion of unfair competition, for example through price dumping or disregard for European safety requirements."