Despite the trials and tribulations of the past 18 months, the European machinery industry has been performing very well, with manufacturers reporting record order volumes.

With manufacturers’ turnover forecasts for the full year of 2021 very positive on average across all segments, CEMA’s latest Business Climate Index market trends report shows that the machinery industry in Europe is at a 13-year high.

Each month, CEMA (the association representing the European agricultural machinery industry) carries out a survey within the European agricultural machinery industry with coverage of all major sectors to look at the current and future business situation.

The association’s June report shows that the general Business Climate Index for the agricultural machinery industry in Europe may have reached its peak at the record level of +72 points (same as in May) on a scale of -100 to +100.

This is its highest level since 2008 after having reached the positive range in October for the first time since mid-2019.

Challenges

While order volumes are at record levels, the association outlined that the industry is challenged by extreme price increases and shortages on the supplier side.

It outlined that steel has more than doubled in price in the past year, jumping from €550/t up to €1,250/t.

Over the course of the last nine months, the association has outlined a clear upward inflationary trend for all key materials including foundry products (+90%), copper (+63%) and natural rubber (+67%).

In the June report, the survey participants’ expectations for further growth in the order intake have weakened for the first time this year.

An air of caution must also be exercised as the positive base effect from the 2020 comparison might soon run out when evaluating the current business.

However, turnover forecasts for the year ahead remain very positive across all segments and the regional breakdown still shows the majority of participants in each market in Europe are expecting turnover increases in the coming six months.