REUTERS reports German Construction Industry to expect Stagnation

According to a REUTERS’s report, construction industry will have to cope with stagnating business, after a promising start into 2020. Turnover is supposed to stay at previous year’s level of 135 million EUR, as the trade association HDB stated. Taken into account the development of prices, this equals a decrease of three percent. “Corona epidemic will leave its traces also in our industry”, HDB president Peter Hübner said. The number of staff however might be stable at the level of 870.000. Industry had started the year with a record orders cushion of 52 Billion EUR, expecting a growth of turnover of about 5.5 percent. At the moment, the decline of orders would be at a 30 percent level. “If it goes on like this, it will be dramatic”, Hübner said.

What makes customers still invest in KÖLSCH machinery?

We refer to ourselves as “The Specialists for Processing and Recycling”. Our product portfolio comprises crushing, sieving, piling and washing of natural stone and recycling material. New business ranges are wet processing and environmental technology.

As a dealer and consultant for single machines as well as for complete solutions, we concentrate solely on premium manufacturers and equipment and deliver professional service and excellent spare parts supply.

Of course, the Corona crisis influences our business. Not so much concerning the construction sector. Especially infrastructural projects often need to be continued, so there is always a demand for construction material.

Concerning industrial buildings however, we witness a serious downturn. On the contrary, there is a vivid development in the private construction sector. In bad times, not too many people want to keep their money in the bank.

We also see, that middle-sized customers with a workforce from four to about 40 people in their majority still have work, often of long-term nature. Smaller companies tend to postpone their purchase of crushers or screens. Large companies usually freeze their investments.

What helps us through this crisis? It still is the KÖLSCH delivery capability and flexibility. Rental requests are getting stronger thus we are expanding our rental park. Customer tend to emphasise more on safety, i.e. they want to make sure, that after-sales and service can be relied on. Reliability is vital for our success, now more than ever.

We are very aware of the problems our customers are facing. Working for just one, big client, quite often can lead to serious problems. At the moment, middle sized companies tend to be more stable, many of them still have orders dating to the year before, being engaged until this year’s late summer.

Bettina McCusker, Jürgen Kölsch GmbH

REUTERS signals the possible end of the long-time boom phase

Berlin, April 27th – REUTERS signals the possible end of the long-time boom phase for the German construction industry. Corona crises is expected to slow down business to stagnation in 2020. Though sales were going strong in January and February, the total turnover will only reach the level of 2019, this is what the Central Federation of the German Construction Industry (HDB) issued last Friday, April 24th. “Facing the growing number of reports of order cancellations, fewer calls for tender and restrictions to the construction activities, a growth in turnover is becoming unrealistic”, says HDB Managing Director Dieter Babiel. In December, the industry still announced a 5.5% growth. “Almost 60% of our members questioned are subject to Corona-caused restrictions”, Babiel said.

Zeppelin counts on “social distancing” – and elaborated Internet Services

Right now social distancing characterizes our business with new and used construction equipment. To stop the advance of the Corona virus, we widely dispense with personal sales and offer our Internet Services as shopping source for machines, modifications and accessories.

Possibilities are manifold: Customers may choose from a wide variety of used machines, they may check the value of used equipment, configure a new machine, order equipment, spare parts or services via mouse click and get them delivered right away.

This is essential, as most construction sites keep running for the time being. Zeppelin grants services and spare parts to be available as fast as possible. What construction sites operators need now, is a reliable, sturdily organized business partner.

The danger of getting infected can be minimized with common sense and by maintaining distance. Helpful is of course, that most construction activities take place outdoors.

Klaus Finzel, Communications Manager, Zeppelin Baumaschinen GmbH

The Corona crisis: Is there a way of making „the best of it?“

How is the construction industry feeling about the current situation? Are there any recipes for success? Are there even beneficial effects to be seen? As their advertising agency, we asked some of our best customers.

Having all just left rather frugal Easter holidays behind us, we are looking at a more and more difficult economic situation in Germany. Meanwhile 725,000 companies announced short-time-work, that is they apply for government assistance to pay their employees. Many offices are empty, whoever is allowed and able to, stays at home and works from there. Practically all German car manufacturers, our national pride and joy, stopped their production and are on hold. Corona restrictions brake down economy and industry as a whole. Substantial alleviations like the re-establishing of the freedom of assembly will have to wait. It is not even sure, if the Steinexpo 2020 in late August will take place.  

Construction Industry: Like the “Little Gallic Village”
Against this background, the construction industry may be considered as the notable exception. Many construction sites are still up and running, although frequently two problems occur: Many workers that come from abroad have difficulties in passing the borders, so the workforce on many sites is cut down. Construction material coming – or not coming – from abroad is also a problem.

A positive effect of the dramatically reduced car traffic on small roads but also freeways: This would allow to carry out long-overdue road reconstruction measurements right now. The demand and necessity for road and infrastructural repair in Germany is tremendous. Though opportunity is golden now, there is a constant lack of contractors, what the current crisis will probably not change for the better.
Concerning the construction equipment, many of the ordered machines will be delivered as scheduled, there is even still a substantial new machines business going on. However, some dealers currently refuse to take used equipment as trade-in. Some manufacturers and dealers have severe problems with the spare part supply, so more than one service organization is closed.

When enemies become friends
The Corona crisis separates those machine dealers who still have their own spare parts warehouses from those who saved money and space by relying fully on just-in-time delivery. Desperate as they are, they sometimes even pass their customers in need of repair works and service on to their former competitors, if these are only able to grant it.

One macabre Corona side effect: Business with rental machines is thriving, especially power generators, tents and the material needed to establish and provide makeshift hospitals and medical tents. Another Corona-caused boost for the construction industry, a grim one of course. 

Thomas Krätz, SK+P