The European agricultural machinery industry’s business climate index slightly dropped for the second consecutive month, reaching 0 points in July from +4. This decline primarily affected arable equipment, transportation, and components, unlike previous months when harvesting equipment and tractors saw deterioration.
Market confidence remains low in France, particularly for tractors, arable, and harvesting equipment, with Germany also performing poorly in these segments. Conversely, Spain, Poland, and the UK show strong confidence, leading the European market.
A significant amount of dealer stock, which had reached record highs due to an inability to pass on orders, has now been sold off. As a result, current dealer stock levels are below the three-year average across all European markets.
Some momentum has already appeared in the market during Q1 2025, and the outlook for this year, even though not very good, is slightly better than 2024. This should translate into an uptick in sales and production for 2025, although it might take a few months to fully manifest itself, as many players are still expressing some concerns. Low overall market confidence could delay a recovery, especially with the fear of the looming threat of tariffs and trade wars that could be occurring. Ag especially would be hit the hardest. PSR
Emiliano Marzoli is Manager of European Operations for Power Systems Research
