Construction Equipment Market: Q2 Update

Industry Insights Comments

Cat wheel loaders ready to be sold at an unreserved Ritchie Bros. auction

Construction equipment sales on the rise in North America

Construction equipment sales in the US, Canada, and Mexico are expected to mark their 3rd year of increases since hitting a peak in 2008 with an expected 7.5% rise in 2012.

Skid-steer loaders are expected to account for 18% of overall construction equipment sales, followed by hydraulic excavators at 11% and loader backhoes at 7%.

Caterpillar continues to lead the equipment market after having overtaken Polaris and Deere. Caterpillar accounted for 13.5% of industry-wide sales in 2011 with Deere and Polaris taking up 11.5% and 11% of the market respectively.1

Chinese construction equipment market declines 37%

Chinese equipment sales declined 37% in the first half of 2012 as a result of credit tightening and other policies aimed at cutting inflation and curbing China’s booming real estate market.

Sales for the first half of the year dropped to 196,370 machines as compared to 314,090 for the same period in 2011 and are expected to be down 30% overall for the year. Moderate growth is expected to resume in 2013 with a 10% rebound forecasted.

The downturn has been most severe in mobile cranes, hydraulic excavators, and wheel loaders where volume is down 45%, 41%, and 35% respectively. Less severely affected were mini excavator sales where volume was down just 20%.2

Caterpillar has begun exporting China-made wheel loaders and hydraulic excavators to markets in Africa and the Middle East as a result of decreased Chinese domestic demand. 1

India equipment market set to resume steep sales growth

Sales in India have been flat to-date but are expected to grow sharply through 2013 as the country cements its position as the 3rd largest equipment market in the world, ahead of Brazil and Germany.

Growth will be driven largely by planned infrastructure development that is part of India’s 12th five-year plan that started in April of this year and ends in March 2017.

Among the high volume machine types, crawler excavators are expected to benefit most from the rise in demand followed by backhoe loaders and wheel loaders. The wheel loader market alone is expected to more than double over the next four years. 3

Sources:

  1. Stark’s Truck & Off-Highway Ledge, August 6, 2012
  2. http://www.khl.com/magazines/international-construction/detail/item77871/Chinese-equipment-market-fell-37pc-in-first-half-of-2012/
  3. http://www.khl.com/magazines/international-construction/detail/item77936/
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