European farm machinery market edges closer to recession

4th June 2026 webmaster

The European agricultural machinery industry is showing increasing signs of weakness, with the latest CEMA Business Barometer indicating that business confidence has slipped further into negative territory and is now approaching recession levels.

According to the May 2026 survey, the CEMA Business Climate Index (CBI) fell from -6 points in April to -9 points in May, marking a continued deterioration in sentiment across the sector. The monthly survey, conducted among around 140 senior managers from nine European countries, points to weaker expectations for turnover and order intake over the coming months.

While manufacturers have reported a consistently challenging current business environment throughout the year, the latest decline was driven largely by a sharp downgrade in turnover expectations. Only slightly more than 10% of respondents expect incoming orders to increase during the next six months, highlighting growing concerns about demand across the European market.

The arable equipment sector remains under the greatest pressure and recorded the weakest business climate of all machinery segments surveyed. In contrast, manufacturers serving the livestock sector reported improving conditions and continue to outperform the wider market.

Current business assessments also remain subdued. Just 18% of respondents described current trading conditions as good or very good, while more than half rated the situation as unfavourable or very unfavourable.

Employment intentions, however, remain relatively stable. More than 80% of companies expect to maintain their current permanent workforce levels, while 11% plan to increase staffing and 8% anticipate reductions. Temporary employment is under greater pressure, with 27% of respondents expecting to reduce temporary staff numbers.

The latest findings suggest that Europe’s agricultural machinery industry continues to grapple with weak farmer investment sentiment, high financing costs and ongoing market uncertainty. While some segments continue to perform well, particularly livestock equipment, overall confidence remains fragile as manufacturers look ahead to the second half of 2026.