PLANT manufacturers should brace themselves for consolidation and further factory cutbacks as the global economic climate continues to bite.
Analyst David Phillips of Off-Highway Research, speaking at the pre-Intermat press conference last week, said the outlook for plant in Europe this year was flat at best, although these forecasts are being measured against record results in 2000.
But manufacturers exhibiting at the show had a wide range of launches to announce, although a number said they were drawing in their horns.
Mr Phillips said: 'The level of activity is high but so is the level of uncertainty, with factors such as the war in Iraq and the US business scandals affecting confidence.
Until that level of confidence returns, the market won't return. We have got to get the war over with.'
He warned that consolidation would continue, driven by a surplus of capacity.
'Despite all the mergers having taken place, there is still a lot of excess capacity around and, while companies are now building factories closer to their markets, they have yet to close the original ones.'
A number of companies said they had had to make changes to increase efficiency. Caterpillar, for instance has shed a number of staff around the world recently.
Caterpillar spokesman Charles Belouin said: 'This year will be tough. We are confident we can cope with the situation. We have measures in place and we have remained profitable. Ten years ago we couldn't have done that.'
Other firms are restructuring to reduce costs. Concrete specialist Belle has closed its Chesterfield factory and moved production across Derbyshire to its Sheen plant. It is also seeking a manufacturing partner for its distinctive skid steer loaders, having decided that the sector is too capital-intensive to develop on its own.
The company signalled its intention to concentrate on concrete and compaction equipment - where sales rose by 40 per cent last year - by raising its reversible plate range from five to 11 machines at Intermat.
Some exhibitors have targeted more fruitful regions than Europe and the USA. Liebherr's Gerard Dobler said: 'Our Chinese factory increased capacity by 25 per cent last year, which is a reason for optimism. Unlike some others, we are not losing money.'
Mr Phillips said he believed the rapidly growing Chinese plant industry would have an increasing impact on the European stage, particularly when the massive domestic infrastructure programme was finished.
Two Chinese companies had already had equipment CE-marked for European use and, while distribution remained the biggest challenge, Chinese manufacturers would be looking to export in the future, he said.
He added: 'Most global manufacturers are in joint ventures with Chinese firms and I believe that the Chinese companies will start to brand equipment for their partners where there are gaps in the product range. It will be cheaper and quicker than building the equipment themselves.'
The first fruits of these arrangements will be seen in the next few months, when Daewoo introduces its range of mini excavators, which are being built in China by its joint venture partner.