Starting under a disruptive cloud of fine volcanic ash, Germany’s triennial construction equipment show, Bauma, ended on an optimistic note in Munich last week. Flight bans reduced the show’s visitor numbers, but global equipment sales are reviving, report exhibitors.
“What a difference a year makes,” says Mike DeWalt, director of investor relations at Caterpillar Inc., Peoria, Ill. From fast-falling sales in last year’s first quarter, now “demand for our products is rising,” he says.
Last week’s show, held on April 19 to 25, was the biggest-ever Bauma in terms of sheer space, say officials at organizer Messe München GmbH. Braving the recession, 150 more exhibitors than last time agreed to take part, for a total of 3,150 exhibitors at the show complex.
But with ash from an Icelandic volcanic eruption halting flights in the first couple of days, 15% fewer visitors came than in 2007. The slip wasn’t a biggie for Bauma, though fewer international attendees showed up. Of the roughly 415,000 people at the show, two-thirds were from Germany.
Yet, Messe München notes optimism in the industry, citing comments by Ralf Wezel, secretary-general of the Committee for European Construction Equipment, Brussels. “The mood in the industry shows that, in Europe, the bottom of the cycle is now behind us. Confidence has returned,” he says in a statement.
The gentle upturn has been the theme across the globe. “It looks as though the first quarter of this year is slightly better than the last quarters of last year,” says David Phillips, managing director of Off-Highway Research Ltd., London.
With large stocks of relatively new machines in place, Phillips says he expects demand in North America and Western Europe to show “not much” improvement in the next 24 to 36 months.
Caterpillar’s DeWalt reports improved demand in “most geographic regions, although it’s much more robust in the developing countries.” The company’s manufacturing plants are again recruiting in Asia, Latin America and in those U.S. facilities experiencing strong export demand.
In the U.S., Caterpillar is winding down its “rolling plant shutdowns,” which started last year, and is “selectively adding to employment to support increasing demand,” adds DeWalt. Cat forecasts unchanging inventories this year, with dealers starting to buy again by Christmas.
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