Industrial plant manufacturers venture optimistic outlook
Technological knowledge, methodological competence and internationality are the prerequisites for holding one's own on the world market.
Last year, the VDMA Large Industrial Plant Manufacturers' Group (AGAB) suffered a historic decline in order intake of 35 % to € 11.9 billion. From this lower starting level, most members of the AGAB are optimistic that things will pick up again in 2021. According to the results of a recent survey, around 60% of companies expect global project volumes in large-scale plant construction to grow and more than 90% of respondents anticipate constant or rising orders in the current year.
However, the survey also shows that competitive pressure will increase and the market for large-scale plants could consolidate further. Furthermore, project execution continues to be hampered by entry restrictions and quarantine requirements, as well as a lack of face-to-face contact opportunities. It could therefore be some time before the order levels of 2019 are reached again. Many plant engineering companies expect the catch-up process to last until 2023.
Opportunities and potential in the market
The general confidence in large-scale plant engineering is fed by various sources. The expected economic recovery - the IMF forecasts 5.5% growth in world GDP for 2021 - a possible de-escalation of trade conflicts and the funds available for investment in various reconstruction funds could provide impetus on the demand side. In addition, large-scale plant engineering provides customer-specific solutions for greater sustainability, which are particularly in demand in the current market environment. Technologies for CO2-reduced steel and cement production, carbon-free power generation or the recycling of recyclable materials are just a few examples of the industry sector's innovative expertise in the area of climate protection.
Furthermore, plant operators are increasingly requesting technical services along the entire process chain in order to improve the performance and availability of industrial plants. In the current phase of uncertain investment conditions, such services can help stabilize the order and earnings situation in large-scale plant construction. Finally, the training of plant personnel is a core component of the services offered by VDMA Large Industrial Plant Manufacturers. Through training and further education, plant manufacturers enable their customers to operate and maintain the products supplied with their own personnel. Especially in emerging countries, which often suffer from underemployment and skill deficits, such offers are a useful sales argument.
Industry strengthens its competitiveness
As a result of the pandemic, the market environment in large-scale plant construction is characterised by extreme uncertainty. AGAB members must therefore remain flexible in order to be able to react agilely to market fluctuations. Co-operations with plant manufacturers, engineering companies, customers and service providers create the necessary room for manoeuvre. In addition, the companies exploit efficiency potential through the use of digital tools and innovative technologies (e.g. robots and drones) and open up new business areas, for example in service, logistics and software development.