Written by Justin Roberts from Agriland
Machinery manufacturers have been reporting full order books and a very positive market throughout 2021 so far.
Indeed, the biggest problems they have faced is being able to make the equipment fast enough in the headwinds of material shortages and rising prices.
CEMA is the umbrella organisation representing the European agricultural machinery industry. It keeps a close eye on developments and trends within the trade, and the latest news from the association suggests that inflation may well be impacting sales.
The cost of raw materials has shot up in the last year, with steel having at least doubled while copper has risen 63% and plastics by around 70% in the last six months alone, according to CEMA.
Sentiment is still positive
In its latest report CEMA notes 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”, which is the same as May.
This score is based on a scale of -100 to +100 and it certainly appears to show a high degree of confidence.
Some caution must be exercised though, for the positive base effect from the gloomier prospects of 2020 might soon run out when evaluating the current business.
This is not to say that trade is declining; for many companies, forecasts for 2021 remain positive across all segments. The regional breakdown also shows that for each single market, a majority of companies expect an increase in turnover over the next six months.
Factories are keeping busy and employment is set to increase
However, the question remains as to whether this increase is due to rising prices or extra volume.
The prospects for maintaining, or even increasing employment levels remain good. All participants in CEMA’s latest survey suggest either an increase or preservation of the number of regular employees.
This would indicate that the volume of machinery made could reasonably be considered the reason for the increase in income.
Technology in machinery
Yet that rise may not be entirely due to traditional fabrication of machines. The participants of the June survey named digitisation and connectivity as core areas of growth.
Manufacturers are more frequently focusing their attention on technologies such as mechanical weed control.
CEMA notes that this development is being driven by legislative measures relating to plant and water protection and the associated customer demand.
The post Machinery boom may have peaked – CEMA appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...
Machinery manufacturers have been reporting full order books and a very positive market throughout 2021 so far.
Indeed, the biggest problems they have faced is being able to make the equipment fast enough in the headwinds of material shortages and rising prices.
CEMA is the umbrella organisation representing the European agricultural machinery industry. It keeps a close eye on developments and trends within the trade, and the latest news from the association suggests that inflation may well be impacting sales.
The cost of raw materials has shot up in the last year, with steel having at least doubled while copper has risen 63% and plastics by around 70% in the last six months alone, according to CEMA.
Sentiment is still positive
In its latest report CEMA notes 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”, which is the same as May.
This score is based on a scale of -100 to +100 and it certainly appears to show a high degree of confidence.
Some caution must be exercised though, for the positive base effect from the gloomier prospects of 2020 might soon run out when evaluating the current business.
This is not to say that trade is declining; for many companies, forecasts for 2021 remain positive across all segments. The regional breakdown also shows that for each single market, a majority of companies expect an increase in turnover over the next six months.
Factories are keeping busy and employment is set to increase
However, the question remains as to whether this increase is due to rising prices or extra volume.
The prospects for maintaining, or even increasing employment levels remain good. All participants in CEMA’s latest survey suggest either an increase or preservation of the number of regular employees.
This would indicate that the volume of machinery made could reasonably be considered the reason for the increase in income.
Technology in machinery
Yet that rise may not be entirely due to traditional fabrication of machines. The participants of the June survey named digitisation and connectivity as core areas of growth.
Manufacturers are more frequently focusing their attention on technologies such as mechanical weed control.
CEMA notes that this development is being driven by legislative measures relating to plant and water protection and the associated customer demand.
The post Machinery boom may have peaked – CEMA appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...