THE OPPORTUNITIES AND CHALLENGES THE CONSTRUCTION INDUSTRY IS FACING IN 2023
In recent weeks, many companies have been looking to the new year of 2023 with mixed feelings. The coronavirus pandemic, which dominated the past two starts to the year and caused major restrictions, has faded in significance. Even China, which had, until recently, operated the strictest “no covid” strategy, has began easing restrictions. But the industry is still holding its breath.
The start of the war in Ukraine last February not only impacted business and production within the EU, but also across the entire world. Economists expect a difficult period ahead for the global economy.
Pricing pressure is on the rise and many companies are passing on the costs for raw materials and energy to end users. But prices for energy have risen less sharply than anticipated and despite gloomier forecasts, the EU Single Market has proven more stable than many experts initially assumed.
Challenges for 2023
At the start of a new year, the Global Risk Report containing forecasts for the year is released. The biggest challenges in 2023: Rising costs in all areas of life and business, climate change and shortage of resources. But crises can either bring things to a standstill or drive innovation – an incentive for companies to look into and optimise their own production facilities.
According to a survey by Germany’s Mechanical and Plant Engineering Association (VDMA), 48% of decision-makers surveyed from the industry are behaving with optimism, with just 14% taking a pessimistic view of this year. But the challenges of 2023 vary for the different branches of the industry.
The end of the construction boom
The construction industry is gearing up for a difficult 2023. Costs are set to rise further, while order volumes will decline. The previous year’s problems are carrying their consequences into 2023 and ultimately putting a stop to the construction boom, which had been continuing non-stop right up until the pandemic broke out.
Major new build projects in planning cannot be implemented in full. And in light of current interest rates, private individuals are shying away from taking out loans and investing in property themselves. The increase in sales seen in the previous year is all linked to growing prices for raw materials, with inflation adjusted growth in construction volumes not expected again until 2024.
To help the industry, governments now need to take a clear route to be able to execute projects and effectively circumnavigate obstacles. Because despite stagnated housing construction, an upswing in the construction of infrastructure is still possible. Even more sustainable renovation projects are conceivable and could be implemented, despite economic problems. The EU has set itself the goal of becoming climate-neutral by 2050, something which can only be done if every necessary step is taken. What construction companies need to do now is respond quickly and prepare for a year packed with challenges, to ensure that they can stand up to the competition.
Equipped for the future
Inflation, supply chains, sustainability – there are many aspects that determine the success or failure of the industry. The current economic situation and geopolitical circumstances only allow for clear predictions of the effects of 2023 on production to a limited extent. However, companies should look at these challenges as opportunities and use them to expand and modernise their in-house processes. Budgets must be used wisely and new investments calculated with care.
To stay ahead of the competition in 2023 despite rising prices and supply chain problems, second-hand machines are a worthwhile investment. They are available in high quality for a lower price and are ready to be used in just a short time. Working together with experts like industrial auction house Surplex, companies can find the best machine to suit them and upgrade their production facilities with second-hand machines with the help of a competent, all-round service. This will enable companies to release the brakes ever so slightly.
Surplex is one of Europe’s leading industrial auction houses and trades worldwide in used machines and factory equipment. The 16-language auction platform Surplex.com is visited around 45 million times every year. It sells more than 55,000 industrial products per year in over 800 online auctions. The company is based in Düsseldorf and has offices in 15 European countries. Over 220 employees from 20 different nations generate an annual turnover of more than 100 million euros.