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It comes to the Crunch
Editorial December 2008

The year 2008 was the year when the economic good times came to an end and it is clear that 2009 will have a colder and much harsher economic climate.  What effect might this have on the market for construction collectibles and what can we expect to see?

For collectors, spending on models is discretionary and no doubt if times are very hard then it is one area of expenditure that can be reduced or eliminated entirely.  However at the same time most collectors are committed to their hobby, and will find a way to continue collecting.  Those able to take a longer term view may conclude that any money spent is actually an investment and that ultimately much of the money will be got back when a model, or collection is sold.  Overall softening of the demand for models can probably be expected in 2009 unless the sector takes a more aggressive view of marketing.

Turning to dealers, fewer sales means pressure on margins so expect to see some clearances of old stock at attractive prices to generate cash.  The smarter dealers will find ways to generate sales through increased marketing, special offers in conjunction with makers, and perhaps by making it easier for collectors to pay for models.  Maybe a few will drop by the wayside.

Original Equipment Manufacturers (OEMS) face a sharp turnaround in orders as the drop in private sector construction work hits contractor's order books.  The mining sector in particular faces severe capital expenditure cutbacks as the prices of metals plummets affecting investment decisions.  Many OEMS will look to there marketing budgets as an area to cut and so fewer models may be commissioned than in recent times.  This may manifest itself more in 2010 than 2009 however as many of the models appearing soon will have been commissioned a year or more ago.  However with that said the next BAUMA exhibition is in 2010 and decisions will be being made now concerning models that may appear in 2010, and the stronger companies will be investing to survive, and some of the weaker ones may disappear or be be acquired.

All of which brings us to the model makers.  On the face of it they could be squeezed by fewer commissions from OEMs and fewer sales into the collector marketplace.  Some models already commissioned may be put on hold at the tooling stage.  However on the plus side raw materials are getting significantly cheaper as the cost of metal commodities drops.  The stronger model makers will see opportunities, and we may see more liveried versions of models where the tooling costs are already paid for, to try and appeal to the collector's habit.  Will all the current model makers survive?  2009 will be an interesting year.

Cranes Etc