ANNUAL ECONOMIC
REPORT Dear reader, 2022 was the year of resilience and strength! What can we expect from 2023? The report you are reading contains an in-depth analysis of the macroeconomic situation in Europe, insights into your major client sectors, such as construction, mining and rental and a substantial focus on the sales performances of machinery & equipment. 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 all along the year. Russia’s aggression against Ukraine has brought open war on the European continent and has had a profound impact on the European economy in terms of energy security and affordability. For our industry, Russia is an important export market, but as the figures show, the 40% drop in sales in Russia has been largely replaced by other trade flows. If we don’t account for this drop, overall sales of construction equipment in Europe are actually up by 3%. Other global regions of Europe’s export have also kept a strong pace. We are publishing this report 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. The business sentiment that we gauge monthly through the CECE Business Barometer has moved back into optimistic territory at the end of 2022, right around bauma in Munich. The full order books allow us to believe that early 2023 will remain positive, but the uncertainties around inflation and interest rates provide for a very unstable macroeconomic picture. It is now difficult to make a numerical forecast, but the Equipment Market chapter of this report will provide some relevant market intelligence leads for companies and investors to ponder. 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 of the sector amongst the wider audience. Comments are always welcome and can be directed to info@ cece.eu. If you want to get an overview of the report before reading it, please take a look at this video. We strive to provide CECE members and the public with all relevant information and intelligence, produced by our own team of economists. Indeed, this report is produced by a small group of experts from the CECE member associations and the CECE team in Brussels. Please read more about them on page 17. The report also includes information provided by our national member associations, shedding light on specific market developments.
Executive Summary During the past six months there have been significant changes in Europe that have impacted on the economic environment for construction. This includes the war in Ukraine and the anxiety it has caused across the region. As a result, the outlook for growth in new residential construction has deteriorated. The outlook is not much brighter when considering the situation in other sectors within the construction industry.
MINING INDUSTRY
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 the 2021 levels.
EXTRA FEATURE: RENTAL INDUSTRY
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 opinion on current business conditions in Europe, but only just.
EQUIPMENT MARKET
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.
OUTLOOK
I hope you will enjoy the reading!
March 2023
M A R C H 2023
CONSTRUCTION INDUSTRY
Welcome to the CECE Annual Economic Report!
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No.9
Riccardo Viaggi CECE Secretary General
At the beginning of 2023, manufacturers are reporting a positive business situation and near-term future expectations. Thanks to the strong order backlog, 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.
CECE ANNUAL ECONOMIC REPORT
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