The European agricultural machinery industry has bottomed out and is now showing signs of stabilisation, according to the latest CEMA market trends report.

The report outlines that the general business climate index for agricultural machinery in Europe has risen slightly for the first time after a 14-month decline.

Each month, CEMA (the association representing the European agricultural machinery industry) carries out a survey within the European agricultural machinery industry, covering all major sectors to establish the current business situation.

A points scale (-100 to +100) is used to assess the state of the industry and determine the business climate index. Earlier, in April the index dropped from -55 to -57 before appearing to bottom out and retract from -57 to -51 points in May, marking the first rise in over 14 months.

It is now 12 months on since the association first flagged the dip in the marketplace when confidence first started creeping into the tractor and tillage equipment market. This was quickly followed by the livestock machinery and grass harvesting market segments.

In terms of order intake and turnover, the EU machinery industry presents signs of stabilisation. From CEMA’s analysis, it has found that livestock machinery manufacturers have the most confident outlook in their expectations for the coming six months.

The business climate indices for tractors and combine harvesters have also improved slightly, albeit still below the industry average. Unfortunately, the same glimmer of hope isn’t shared among tillage equipment manufacturers. Tillage equipment is the only segment in which expectations have deteriorated further.

Lead times

Delving into the statistics, 26% of manufacturers surveyed find the current business market to be satisfying, back from 31% in April, while 7% find it to be very good, up from 5% in April.

In terms of future outlook, 61% of manufacturers expect a decrease in turnover, down from 66% in April. Meanwhile, the percentage of EU manufacturers that forecast a growth in turnover has increased from 11% in April to 15% during May.

It cannot be forgotten that the current business climate is being compared to what was previously a very busy five-to six-year period for European machinery manufacturers.

Machinery lead times peaked at the beginning of 2023 before falling into a state of decline thereafter. As result, EU dealers are stocked significantly higher than in 2019, which went down in history as a record year for dealer stock levels.

Based on CEMA’s findings, European manufacturers are now quoting average lead times on new machinery of 3.7 months, the lowest they have been in three years. However, by historical terms this figure is still considered high.

Irish market

Having recently spoken with manufactures and dealers in Ireland, the Irish market isn’t as severely affected as it appears to be in mainland UK and parts of Europe.

For the most part, Irish tractor dealers have been pleasantly surprised with Q1 tractor sales results despite the challenges contractors and farmers have been and are currently faced with.

Long term buying decision are still being made, however the uptake on certain product lines is notably slower compared to previous years.