High interest rates, prolonged bad weather and relatively low farmgate prices across Europe have put a strain on the sales of new agricultural machinery.
Dealer stocks in most European countries are significantly higher than in 2019, which went down in history, recording the highest dealer stock to date, according to the latest CEMA market trends report.
According to the survey participants in the April report, the current business is worse than it has been for more than seven years.
Each month, CEMA (the association representing the European agricultural machinery industry) carries out a survey within the European agricultural machinery industry with coverage of all major sectors to look at the current and future business situation.
It was in May-June 2023 the reports showed that the pendulum had started to swing negatively.
Dealer stocks in most European countries are significantly higher than in 2019, which went down in history, recording the highest dealer stock to date.
However, it’s not that long ago since dealers couldn’t get machines into stock quick enough to meet the demand. Like any industry, it runs in cycles – just as the good times cannot last, the bad times too will pass.
Despite the seemingly negative short-term outlook, it’s worth noting that this is off the back of a very busy five- to six-year period for European manufacturers.
As little as 10 months ago, European manufacturers were quoting an average lead time of 5.5 months for new orders, which was still very high in a historical comparison, but lower than at any time in the past two years.
Irish market
The mood among manufacturers and dealers in Ireland, isn’t as bad as it seems to be in Europe.
Most Irish dealers and manufacturers had a strong end to 2023. Tillage and grassland implement sales were quieter this spring, which many blamed on the high interest rates and the poor weather. Despite this, tractor sales have been very resilient. A total of 878 units have been registered in the first quarter, down just 8.4% on the same period in 2023.
April report
Within each month’s report, the association publishes a general business climate index for the agricultural machinery industry in Europe.
The April index has again deteriorated slightly following the sharp downturn of the previous months.
In April, the index decreased from -55 to -57 points (on a scale of -100 to +100). The association began flagging a dip in the marketplace last May, with confidence beginning to dip in the tractor and tillage market first, followed by the livestock machinery and grass harvesting segment.
The survey confirms again that dealers are struggling to pass on orders to the end customers.
Only 5% of industry representatives consider the current business situation to be favourable.
Future expectations
On the other hand, future expectations have stabilised at a low level. It says that, still, two-thirds of survey participants expect their turnover to decline in the coming six months.
On a positive note, a further and meanwhile significant improvement can be seen in expectations for the coming order intake.
Despite the seemingly negative short-term outlook, it’s worth noting that this is off the back of a very busy five- to six-year period for European manufacturers.
The mood among manufacturers and dealers in Ireland isn’t as bad as it seems to be in Europe.
High interest rates, prolonged bad weather and relatively low farmgate prices across Europe have put a strain on the sales of new agricultural machinery.
Dealer stocks in most European countries are significantly higher than in 2019, which went down in history, recording the highest dealer stock to date, according to the latest CEMA market trends report.
According to the survey participants in the April report, the current business is worse than it has been for more than seven years.
Each month, CEMA (the association representing the European agricultural machinery industry) carries out a survey within the European agricultural machinery industry with coverage of all major sectors to look at the current and future business situation.
It was in May-June 2023 the reports showed that the pendulum had started to swing negatively.
Dealer stocks in most European countries are significantly higher than in 2019, which went down in history, recording the highest dealer stock to date.
However, it’s not that long ago since dealers couldn’t get machines into stock quick enough to meet the demand. Like any industry, it runs in cycles – just as the good times cannot last, the bad times too will pass.
Despite the seemingly negative short-term outlook, it’s worth noting that this is off the back of a very busy five- to six-year period for European manufacturers.
As little as 10 months ago, European manufacturers were quoting an average lead time of 5.5 months for new orders, which was still very high in a historical comparison, but lower than at any time in the past two years.
Irish market
The mood among manufacturers and dealers in Ireland, isn’t as bad as it seems to be in Europe.
Most Irish dealers and manufacturers had a strong end to 2023. Tillage and grassland implement sales were quieter this spring, which many blamed on the high interest rates and the poor weather. Despite this, tractor sales have been very resilient. A total of 878 units have been registered in the first quarter, down just 8.4% on the same period in 2023.
April report
Within each month’s report, the association publishes a general business climate index for the agricultural machinery industry in Europe.
The April index has again deteriorated slightly following the sharp downturn of the previous months.
In April, the index decreased from -55 to -57 points (on a scale of -100 to +100). The association began flagging a dip in the marketplace last May, with confidence beginning to dip in the tractor and tillage market first, followed by the livestock machinery and grass harvesting segment.
The survey confirms again that dealers are struggling to pass on orders to the end customers.
Only 5% of industry representatives consider the current business situation to be favourable.
Future expectations
On the other hand, future expectations have stabilised at a low level. It says that, still, two-thirds of survey participants expect their turnover to decline in the coming six months.
On a positive note, a further and meanwhile significant improvement can be seen in expectations for the coming order intake.
Despite the seemingly negative short-term outlook, it’s worth noting that this is off the back of a very busy five- to six-year period for European manufacturers.
The mood among manufacturers and dealers in Ireland isn’t as bad as it seems to be in Europe.
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