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German construction equipment sales to the Middle East grow

by Oscar Rousseau on Feb 23, 2018

German giant Liebherr manufactures heavy-duty construction machinery
German giant Liebherr manufactures heavy-duty construction machinery

Germany’s construction machinery exports to the Middle East have increased, amid an international sales boom.

The UAE is the biggest market in the Middle East for German companies exporting construction equipment overseas, according to the Frankfurt-based mechanical and plant engineering trade association VDMA.

Exports of heavy-duty machinery for use in the UAE’s construction sector grew by 50% last year, said VDMA, which represents some of Germany’s biggest equipment manufacturers.

Growth has buoyed optimism among German machinery manufacturers, many of whom now tip the Middle East to become one of the fastest-growing markets in the world for industrial construction equipment.

READ: Germany donates 126 Mercedes-Benz vehicles to Jordan

This is a sanguine attitude when you consider overall construction equipment sales in the Middle East dropped by around 10% last year, according to VDMA. But after machinery exports from Germany to the Middle East returned to growth in 2017, increasing by 5%, a soft wave of confidence has washed through the sector.  

It is likely that the UAE will remain the key Middle East market for German machinery manufacturers exporting to the region. In fact, the country accounts for a third of total sales to the Middle East, and given the pace of building development in the country, this is unlikely to change.

“German manufacturers continue to be optimistic about the Middle East markets,” a VDMA economist told Construction Week. “In a recent VDMA survey, 40% of manufacturers expect this region to be among the major growth markets in 2018.”

News of rising German construction equipment sales to the Middle East comes as VMDA claim the industry is “in the middle of a boom”.

Overall, the German construction equipment industry closed 2017 with a turnover of $13.2bn, up 15% on the year before. It is the fourth year in row that revenue has increased. Crucially, businesses do not believe the bubble is set to burst.

Joachim Strobel, managing director of German giant Liebherr, which boasts offices in Saudi Arabia and the UAE, said: “We have not felt this kind of unanimous, great optimism for many years.”

And Franz-Josef Paus, managing partner of Hermann Paus, a German firm that manufactures loaders and dumpers, added: “We are benefiting from simultaneous high demand around the globe and the boom will carry us into 2019.