In a volatile environment characterised by strong price and competitive pressure as well as diverse political and economic uncertainties, VDMA large industrial plant engineering was thus able to record the first increase in its orders since 2013. This growth is attributable to solid export business and a number of mega orders for chemical plants. „In addition, we are seeing that the efforts being made by the plant engineering industry to open up new areas of business – such as services, digitisation or plant operation – are increasingly paying off,“ says Jürgen Nowicki, AGAB (VDMA Large Industrial Plant Manufacturers´ Group) spokesman and Managing Director at Linde Engineering, commenting on current developments.
In 2018, the export ratio in large industrial plant manufacturing was 81 %, and the order level rose from 14.0 billion euros (2017) to 14.8 billion euros. Russia was the most important foreign market for VDMA large-scale plant construction due to several mega orders. In addition, high orders were reported from China, Hungary, the USA and Great Britain. There was also a significant recovery in demand in the Middle East, where bookings rose by 50 % to 2.1 billion euros (2017: 1.4 billion euros).
Domestic bookings fell by 7 % to 3.5 billion euros in 2018 (2017: 3.8 billion euros). The main reason for this was the persistently weak demand in the market for thermal power plants, which dropped to its lowest level in 15 years at around 500 million euros. In view of the foreseeable end of coal-fired power generation in Germany, this trend is likely to continue. On the other hand, business with modernisation and services developed encouragingly with an increase of 42 %.
The members of AGAB are optimistic about the future. According to a current VDMA-survey, 60 % of plant manufacturers expect orders to rise in the current year, while 20 % expect bookings to remain constant. Customer demand is increasingly directed towards medium-sized construction projects as well as modernisation and services.