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Agricultural, construction and earthmoving (ACE) equipment generates significant demand for coatings. Prior to the recession, the ACE equipment coatings market was valued at €2.1bn, with demand at over 500,000t.
The impact of the global recession hit the construction industry hard and spending in real terms fell by almost 20% in 2009. This led to dramatic declines in both equipment orders and output. Dealers and leasing companies already held surplus stock, which placed additional pressures on the equipment manufacturers.
Markets declined by as much as 60% in some regions, including Russia, leading to overall production output of machinery falling by around 40% in 2009. This resulted in considerable shrinkage in associated coatings demand.
Governments set aside significant sums of money for infrastructure and construction projects as part of their fiscal stimulus packages, intended to inject funds into key industries during the downturn. These were more effective in countries like China and contributed to stronger performance in the Asia Pacific region, which account for over 55% of the ACE equipment coatings market.
The agricultural equipment coatings segment performed comparatively better but still witnessed declines in equipment output of around 15%. As a result, the value of the global market for ACE equipment coatings (including industrial trucks) in 2009 was estimated to be around €1.6bn.
As the order books of equipment manufacturers started to fill in 2010, coatings consumption increased by around 3% and is expected to continue growth in 2011. However, a return to pre-recession levels is not expected until 2015.