There will be a 3% fall in East European trailer demand in 2017 entirely caused by weakness in Turkey, followed by slow growth in 2018-19 and then more robust figures in 2020-21, according to the latest forecast from consulting group CLEAR International.
The forecast for Turkey in 2017 is for a fall in trailer demand of 29% on the back of large declines in 2015 and 2016. Political instability had already undermined business confidence in early 2016 and then in mid-year there was an attempted military coup. This had a dire and worsening effect on business investment. As a result, a further 19,700 trailers have been wiped from the Turkish forecast.
In Turkey, there was a referendum in April to decide whether President Erdogan is to be granted additional powers. Uncertainty over the outcome badly affected trailer demand in the first quarter of 2017, and victory for the president has done little so far to improve the situation. Trailer demand fell 39% in the first quarter and 30% in the first half of the year.
In 2015, Turkey was the largest trailer market in the East. That position will be taken up by Poland in 2016 and 2017, with Russia coming a somewhat distant third due to the continuing economic difficulties there. Although Turkey may make a quite rapid recovery, it could be the 2020s before Russia does the same.
Said Gary Beecroft, managing director of CLEAR, “Despite difficulties in the region, particularly affecting Turkey, we will see growth in trailer demand in four of the next five years. This will result in trailer sales exceeding the pre-GFC level of 2006 by the 2020.”
The economic forecast for Eastern Europe is for stronger GDP and investment growth in 2017, which will result in recovering levels of trade and more demand for road transport. However, a cyclical slowdown affecting the whole region will lead to lower GDP and investment growth in 2018-19 before the market accelerates in 2020-21.
In 2016, both Russia and the Ukraine recorded an increase in trailer demand for the first time since 2011, and they, along with Latvia, will be the only countries in the region to record a substantial percentage increase in 2017.
Investment fell in thirteen out of fifteen countries by, on average, 4.1% in 2016. Those countries that are EU members were affected by a five-year EU funding period coming to an end in 2016 before the new period came into effect.