The continued shortage of components is now the driving factor behind long machinery lead times for European manufacturers and not new demand, according to CEMA’s latest market trends report.

The volume of orders in front of manufacturers is running at a production period of six months, which is slightly below the all-time high ever recorded within CEMA’s monthly report.

However, the association has said the reason for such lead times and order backlogs is now no longer from new demand, with new machine order intakes cooling down noticeably.

Each month, CEMA (the association representing the European agricultural machinery industry) carries out a survey within the European agricultural machinery industry with coverage of all major sectors to look at the current and future business situation.

The association’s May report states that industry representatives are no longer entirely optimistic with regard to future turnover from some markets, but it currently is almost purely the price increases and bottlenecks on the supplier side that continue to challenge the industry heavily, even though these appear to be diminishing slightly.

Nearly half of the companies surveyed are planning to temporarily halt production due to a shortage of certain components in the coming four weeks. Manufacturers are expecting this shortage to result in a machine production shortfall of 18% on average for the current period.

Manufacturers are expecting this shortage to result in a machine production shortfall of 18% on average for the current period.

May report

The May report shows that the general Business Climate Index for the Agricultural Machinery Industry in Europe has continued to decrease after its sharpest drop since the crash in the wake of COVID-19, but is in total still holding at a positive level. In May, the index decreased from 20 to 16 points (on a scale of – 100 to +100).

Despite this, a total of 81% of participants are happy with current business, albeit down from 89% in March. Meanwhile, just 33% of participants expect their company turnover to grow in the next six months, down from 54% in February.