Engineering news
Global sales of construction equipment is forecasted to fall again for the fifth consecutive year before a turnaround in 2017, according to consultancy firm Off-Highway Research. Overall sales are expected to rise by 5% next year, following a sluggish spell which saw sales decline in the Chinese market by 70% over four years.
Unit sales in Africa, Latin America, the Middle East and parts of Asia fell down 19% to 158,855 in 2015 and unfavourable economic conditions means they’re expected to fall further to 153,764 units this year, before an upturn in 2017.
The firm expects the Chinese market to stabilise and grow moderately in 2017 after unit sales decreased from 435,070 in 2011 to 131,345 in 2015, with the figure expected to drop down further by another 10% this year to 108,240. The country’s construction and mining crunch has affected Chinese corporations Sany and XCMG, Komatsu in Japan, Sweden’s Volvo, Caterpillar in the US and JCB in the UK.
The impact of China’s economic downturn is waning in Europe however, where the market saw a 2% upsurge in equipment sales to 127,411 units last year. Further increase is expected in the coming years, with sales forecasted to hit 136,380 units by 2020.
In North America sales are expected to fall this year following a 2% decline in 2015 to 167,255 units, after a period of growth that lasted until 2014. While North America faces a downturn before growth returns, 2016 will be a recovery period for the Japanese market before an upswing from 2017 onwards. Sales in Japan fell by 11% from 90,830 units in 2013 to 74,833 units in 2015.
India on the other hand witnessed a 2% increase in sales to 37,465 units. Demand for equipment in the emerging market is predicted to grow by more than 35% rising up to 60,000 units by 2020.
Off-Highway Research managing director David Phillips said: “In the event, 2015 was worse than expected for the global construction equipment industry. Emerging markets were generally weak – the only significant exception being India – and developed regions of the world were not strong enough to offset the painful declines we saw in countries such as China.
“Off-Highway Research’s forecast is that the global market will reach the bottom of the cycle in 2016, which will be the fifth consecutive year of falling construction equipment sales. When it comes, the recovery is likely to be gradual, reflecting weak business confidence and the uncertain geopolitical outlook around the world.”