Invest now for busy times

In preparing this issue of ABE, one message has been repeated to me several times over - companies that use this quieter time to look for technology to deliver improved productivity when markets return to growth will be the ones that prosper in the long term.

Until last year most construction markets in Europe had experienced continued growth over a longer period than ever before. This meant that the demand for aggregates was ever-growing and many companies were caught in the cycle of working to meet the immediate demand without the chance to review operations effectively. But maybe now is the time.

The organisers of 432 Intermat have reported that they have over 1450 exhibitors lined up and that visitor numbers are also expected to be high, suggesting that construction equipment buyers are keen to check out the latest innovations.

In this issue we have details of some of the new equipment that will be debuted at the show in Paris for the quarrying market, as well as some of the latest drilling and breaking techniques that will be available shortly. Although some of the major equipment suppliers have decided against exhibiting this time at Intermat, with a dedicated quarrying pavilion, there promises to be plenty on display to interest the aggregate industry.

While it may currently be difficult to secure finance in Europe to purchase the latest technology, the break in the fast pace of growth allows a little breathing space to review what is available.

Nonetheless, news gathered by my colleagues during a visit to the recent US-based 1158 World of Aggregates and World of Asphalt shows not only confirms interest in the latest innovations, but also a welcome return of the availability of credit. While the traditional financial institutions used by the construction equipment sector have battened down the hatches, it appears that at least one US group has spotted the huge potential the promised government infrastructure investment could bring and is willing to take the risk.

It has been said in the past that because the US was the first to feel the effects of the financial crisis, it is likely to be the first to see the recovery and trigger improvements elsewhere. If this is true, then the news of renewed lending for capital investments offers some hope.

Compiling news stories on full year results for 2008 and current uncertainty over 2009 forecasts shows that we are still in a period of declining profits and difficult decisions. But for companies with their eye on the long term, the prospect of government investment in infrastructure around the world holds a great deal of potential. 725 Lafarge CEO Bruno Lafont has said that he expects significant effect in 2010 from this investment even if the full effect is not felt this year.

Even in the face of these stark figures, it is important not to lose sight of the fact that construction projects are still underway all over Europe, particularly in Eastern Europe where EU funding is available. This means that demand for aggregate does still exist, albeit at a lower level than in the last few years, and is likely to be equivalent to 2005-levels, which at the time were considered good for many.