European Machinery Outlook Improves
A report issued earlier this week by CEMA, the representative body of the European agricultural machinery manufacturing sector, points to cautious expectations that the European machinery market will return to growth during 2017. CEMA provides a monthly insight into the prevailing business climate of the European agricultural machinery industry through a survey called the CEMA Business Barometer which is currently at its highest May level in five years.
The two largest European machinery markets, France and Germany, are experiencing contrasting fortunes to an extent. The French machinery market fell by 8% in 2016 and a further decline is expected to be reported for the first half of this year with the tractor sector in particular faring very poorly in France during the year to date and seeing a fall of nearly 26% in the first quarter. In Germany, the agricultural machinery market fell by some 5% during last year but is slowly recovering with a small increase expected overall while forage harvesters and balers are expected to show the greatest growth. Interestingly, several markets, including even the poorly performing French market, have indicated a good year for forage harvester sales. The outlook for the UK market appears to be somewhat of a flattening in demand with the impact of a weaker sterling reflected in rising prices for machinery imported from the Euro zone.
A slight majority of European manufacturers report optimism in relation to sales prospects over the coming six months with a belief that growth will be more driven by export than domestic demand.
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