What is the outlook for the farm machinery industry?

The outlook for the ‘general business climate index’ of the agricultural machinery sector across Europe is stable, according to industry body CEMA.

Current business has improved, it says, but future expectations are not quite as “high” as was the case in recent months.

CEMA says that order intakes for farm machinery manufacturers are currently “strong“, but will not necessarily increase further. Nevertheless, it says, the forecast for the European industry remains “positive”.

CEMA
Image source: Shane Casey

In December, its ‘Business Barometer’ indicated that 84% of companies (typically tractor and agricultural machinery manufacturers) expected their total turnover to grow in 2018. However, 94% expected to see growth when surveyed during a previous ‘Business Barometer’ in September.

The breakdown by segment shows that the ‘business climate’ for tractors recovered somewhat, but both future and current business levels are still below the industry norm.

Within the arable equipment segment, turnover expectations have slipped.

CEMA
Image source: Shane Casey

Manufacturers of livestock equipment are concerned, it says, about prospects of reducing milk prices.

The regional breakdown shows that a majority of survey participants expect turnover growth in the next six months. By far the best rating was achieved in Poland, which is in the midst of a “strong upswing“.

Germany and France are also faring well in the country-by-country ‘business climate’ rankings. The mood in Spain, apparently, is closer to the bottom – presumably on the back of the drought-affected market there.

On a global level, the highest growth potential is seen in central and southern Asia – followed by the so-called Oceania region.

Employment

Companies surveyed as part of the ‘Business Barometer’ were also quizzed about their recruitment plans.

With regard to regular employees, 39% of respondents expected to hire more staff; 57% forecast no change, while just 4% expected to reduce their work-forces.

CEMA
Source: CEMA

It was a broadly similar picture with regard to temporary staff: 35% anticipated an increase in staff numbers; 57% forecast no change; 8% expected to let some people go.

What is the CEMA ‘Business Barometer’?

CEMA’s ‘Business Barometer’ is a monthly survey across the European agricultural machinery industry; it kicked off back in 2008.

It covers the major, relevant sectors – from tractors right through to municipal equipment.

It targets 140 senior managers from nine (CEMA) countries; the questionnaire is conducted online – in multiple languages to cater for the different countries. It’s actually undertaken by VDMA – for CEMA.

The survey covers specific topics, including: current and future business situation; level of order intake; development of turnover; turnover expectation per country; production plans; employment plans; and several others.

CEMA
Image source: Shane Casey

CEMA is the European association of the agricultural machinery industry. The industry represented by CEMA includes 4,500 manufacturers of agricultural machinery, encompassing 135,000 direct employees and 125,000 indirectly employed in product distribution and maintenance.

CEMA
Image source: Shane Casey

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