Construction industry begins to emerge from the Covid-19 crisis
The Covid-19 pandemic is one of the biggest challenges the construction industry has ever faced. With much of the world going into lockdown, most markets and sectors ground to a halt. Paul Douglas, Managing Director of British articulated hauler manufacturer Terex Trucks, shares some industry insight into the European construction market and explains why he believes there is light at the end of the tunnel...
The Covid-19 pandemic has been extremely tough for everyone, including construction equipment manufacturers who have had to reduce or suspend production at their factories over the last few months. Recently, we’ve started to see some OEMs gradually bring teams back to work and begin a ‘new normality’. At Terex Trucks, we temporarily suspended production at the end of March at our facility in Motherwell, Scotland, in line with our parent company the Volvo Group. During this time, we operated with a small team of dedicated employees who worked to support customers and maintain vital spare parts distribution. I’m pleased to say that now we’ve restarted production and welcomed more of the team back to work. The health, safety and wellbeing of our employees, customers and the general public is our number one priority and we have introduced a wide range of protection and prevention measures at our site. Right now, it’s hard to predict exactly what’s going to happen in the global construction sector over the next few months, but we do see cause for cautious optimism due to the essential nature of construction work. Our customers are active in businesses that are vital to society and the construction industry will be key to global economic recovery. To kick-start economies and drive recovery from the pandemic, we are already seeing governments invest in construction and infrastructure projects as an effective way to create jobs and boost their economies – and there are some key projects on the horizon.
As a British manufacturer of articulated dump trucks, we closely follow the European market – including our home market of the UK. The latest figures from the Construction Equipment Association show that sales of construction and earthmoving equipment in the UK market fell by 40% in the first five months of the year, compared with the same period in 2019. Sales in May were down by 54.5%, compared with the same month last year, as a result of the ongoing impact of Covid-19. However, this was a lower reduction than we saw in April when sales were down by 74%, compared with 2019 levels. While we can’t draw any clear conclusions from this data at this time, I can safely say that the entire industry is hoping that this indicates that April could be the low point in sales this year due to the pandemic and we might see an improvement in the third quarter.
Back to business
In the UK, which is the biggest market for articulated trucks in Europe followed by France and Germany, OEMs are gearing up for the major infrastructure project High Speed 2 (HS2). Serving eight of Britain’s ten largest cities, this high speed railway linking up London, the Midlands and the North is one of the most important economic regeneration projects in Britain for decades, expected to kick-start not just the construction industry but the wider economy. The government has given its approval for work to begin and, due to this project alone, the UK could see demand for articulated dump trucks rise by an additional 1,000 machines over the next few years. In the first stages of the project, articulated haulers such as our Terex Trucks TA300 and TA400 will be used for preparatory tasks and transporting materials before the main construction work can begin. This includes jobs like vegetation clearance and earthwork for tunnel portals and compound facilities.
In France, where we are expanding our distribution network and currently have four dealers – The Manu Lorraine Group, Framateq, Promatex and Griset Material – the population is returning to work and our dealers have started up their sales activities again. Looking ahead, an important project that is expected to boost the French construction sector as well as the wider economy is the Seine-Nord Europe Canal project. This will involve the construction of a 107km inland waterway link extending from France to Belgium, connecting the Seine basin north of Paris to the Rhine basin and the northern European waterway network. For the construction, 55 million m3 of earth will have to be excavated and transported. Robust and reliable dump trucks like the TA300 and TA400 are the natural choice for this task.
As construction activity has slowed down throughout Europe during the last few months, it’s not only machine sales that have decreased – the demand for machine rentals has also declined. This has had a significant impact on German rental companies – where renting accounts for 70 per cent of the market activity – as well as the Italian market.
70 years of hauling heritage
None of us could’ve predicted how much Covid-19 would change our lives in such a short period of time. At Terex Trucks, we started the year looking forward to celebrating 70 years of manufacturing robust and reliable off-highway haulers. Since Volvo Construction Equipment (Volvo CE) acquired Terex Trucks in 2014, we’ve made substantial investments and improvements of around £35 million in our people, processes, products, facilities and distribution network – and we’re continuing to invest. All these investments not only enable us to improve the quality of our articulated dump trucks, but also to be more energy efficient and improve safety.
Because the articulated hauler is the only product Terex Trucks develops, we’re able to focus all our attention on this machine. We’ve installed a new transmission on the TA300 and a new drop-box on the TA400, improved the hydraulic system, added telematics, designed a new operator environment, created a new aesthetic and improved the engine enclosure. We’ve listened to our customers and thanks to their feedback, they are now reaping the rewards of these investments with lower operational costs, higher uptime levels, fuel efficiency savings, extended service intervals, faster fault detection, top quality customer service, and industry-leading parts availability that comes with two years or 6000 hours of parts warranty – whichever comes first. With our hauling heritage and know-how combined with Volvo CE’s considerable expertise, experience and financial backing, there has never been a better time to invest in a Terex Trucks hauler – and with building sites starting to re-open, we’re now getting ready to celebrate our anniversary by providing our trucks to even more customers.