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WHAT’S NEXT?
A lot of the growth for OEMs and contractors has come from Europe and North America. For example, Volvo CE saw sales in Europe increase 17% in Q1, while North American sales improved by 37%. North America drove sales for Caterpillar, with sales increasing by 33% from the first quarter of 2022.
For Hochtief, sales in the Americas, home to its subsidiaries including Turner, Flatiron, and toll road operator Abertis, drove growth for the company in the first quarter; they increased 16% to €4.1 billion (US$4.5 billion) and were up 12% on adjusted exchange rate basis.
China continues to see sales down for most of the companies that report their figures, although with the country ending its zero tolerance policy to Covid, sales are expected to increase this year.
Equipment demand will remain high
The demand for construction remains high globally. Take the two largest country markets; in the US, infrastructure funding from the government is now filtering through and the Chinese economy is predicted to grow by 5% in 2023 – an increase on 2022. Some construction segments will likely see a decline. In a call with analysts Grégoire Thibault, Vinci’s director of investor relations said that he expected “a slowdown in residential buildings, new homes”. In a presentation to investors, Hochtief has set its operating net profit guidance at €510- 550 million (US$560-604 million) for the 2023 financial year. That is broadly in line with the €522 million it made in 2022.