Every month CEMA, the European umbrella organisation for machinery trade associations, publishes a report on the state of confidence within the industry and for this May, the message coming out is not as cheerful as might be hoped.

The general business climate index for the agricultural machinery industry in Europe has shrunk right back since the sharp declines due to the situation in Ukraine.

It is still at a positive level, but only just, for the index decreased from 16 to 11 points (on a scale of -100 to +100).

Availability improving

For much of last year the story was one of large order backlogs, but these have finally peaked in recent months and machinery is now becoming more readily available.

Availability confidence — Dealers inventories are gradually recovering as supply issues ease

However, this is at the expense of a reduction in order volume which is significantly reduced, it now corresponds to a lead time of 5.5 months, which is still high historically, but substantially lower than at any time in the past year.

While there is considerable easing in the supply side shortages, the uncertainties with regard to the sales side of the equation are growing with a corresponding decline in confidence levels.

Cooling of confidence

As a consequence, the industry representatives taking part in the survey have further downgraded their future expectations.

While there is still a moderate majority of company representatives with positive turnover expectations, the trend is definitely pointing the wrong way.

CEMA report — Balers and tankers suffered a long delivery time last year, the situation is quite different this season

Just 15% of respondents feared a decline of sales in March; whereas that figure now stands at 24% while only 36% expect business to grow in the next six months, down from 47% in March.

A further shadow lies in the employment figures with 28% of companies expecting to reduce their temporary workforce this year.

On a regional basis, some large markets such as France and Germany, still enjoy a degree of optimism, but confidence has virtually collapsed with regard to the markets of Italy, Spain and Poland.

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Business index

Is confidence waning within European machinery industry?