Global ag machinery markets still positive, but challenges ahead

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Although the worldwide outlook for 2014 agricultural machinery markets remains positive overall, manufacturers foresee challenges to maintaining the high production levels of 2013, according to the latest business-barometer survey from the Agrievolution Alliance.

The alliance is a global coalition of agricultural equipment manufacturing organizations working to advance agricultural interests worldwide through collaborative action on industry issues, data exchange and public policy outreach. The goal is to promote better understanding of modern agricultural machinery’s important role in sustaining a growing world population.

The Association of Equipment Manufacturers (AEM) is alliance secretariat. The German VDMA machinery association is secretariat of the alliance’s economic committee.

The alliance’s economic committee conducts the biannual survey, released in May and November. Senior-level agricultural equipment manufacturing representatives relay their current business situation and outlook for their respective markets.

The survey provides alliance members and their participating companies with timely and accurate global market trends data for business planning. The alliance also releases a public summary report, available on the AEM website (www.aem.org) in the Agriculture section; it will also be available on the Agrievolution Alliance website (www.agrievolution.com).

Survey summary outlines regional business expectations

While only 18 percent of the survey respondents said they were not satisfied with the current business situation, less than 50 percent expect further growth in the next six months.

Most cautious were the expectations of the companies in Western Europe and Japan. A trend towards an economic downturn seems to be initiated for the European manufacturers of agricultural machinery, as major home markets are declining, especially in the Eastern part of the continent.

In North America, the industry business climate remained positive, based on high sales in the first months of 2014. A majority of business owners and managers see more growth of their revenues in the months ahead, despite the fact that sales figures in the U.S. market declined recently.

In South America, manufacturers are relying on the good economic basis of their customers and expect a further expansion of their investment in equipment in order to cultivate additional areas.

The trend towards higher mechanization of agriculture in China and India persists, which leads manufacturers in those markets to expect that demand for new equipment will again be higher in 2014 compared to last year. However, some survey respondents reported that their order intake levels have gotten lower over the past three months.

In general, the perspectives on the agricultural machinery markets remain positive on a global level. The alliance’s economic committee expects a slight decline of the global market, but only to a minor extent, based on a further strong demand in the emerging markets and on above-average agricultural commodity prices.

For more information on the Agrievolution Alliance and its activities, go online to www.agrievolution.com.


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