The Eastern European trailer market will take a hit in 2016 but continue to grow at an above-average rate in 2017, a new report found.
According to UK company, Clear International, the east of Europe has suffered from political instability in Turkey this year that undermined business confidence across the region.
The market will thus only grow at around six per cent in 2016, Clear found, which is “considerably lower than anticipated” and will wipe some 10,000 trailers from the original forecast.
In 2017, growth will further slow to five per cent, according to Clear’s Managing Director, Gary Beecroft.
“Eastern European trade in goods reached an all time high at the end of 2013, but the growth was choked off in the second half of 2014 [and] the situation has since worsened,” Beecroft explained.
“[While] the economic forecast is for stronger GDP and investment growth in 2017, which will result in recovering levels of trade and more demand for road transport, a cyclical slowdown affecting the whole region will lead to a fall in trailer demand in 2018 before growth resumes.”
Most impacted by the drop will be global powerhouse Russia and up-and-coming Turkey, he added, with Turkey likely to lose the number one spot as the largest trailer market in the region.
“That position will be taken up by Poland in the current year, with Russia coming a somewhat distant third due to the continuing recession there,” Beecroft said.
Despite the top-three ranking, he added the situation in Russia was concerning – so much so that it may not see a full recovery until the 2020s.
“[However,] even though the outlook for Russia has worsened, 2015 was the nadir for the market and demand will grow in all years but one to 2020.”
As such, a budding recovery in Russia and neighbouring Ukraine may well turn out to be the linchpin for facilitating additional growth in the region, he said – if does end up happening.
“Political instability and military conflict has resulted in Eastern Europe being stuck at roughly the same level of trailer demand since 2011,” he summarised.
“The cyclical economic slowdown, most likely occurring in 2018, means that it may well be 2020 before we see the market move ahead decisively.”