Global Equipment Market Forecast to Improve in 2016
The expected improvement in the global construction equipment market this year follows a weak performance in 2015, when global unit sales fell more than 10% from the total of nearly 818,000 machines sold in 2014.
In 2016, growth is expected in the European, North American and Indian equipment markets, according to Off-Highway Research, an economic forecasting and market research consultant.
The firm also forecasts a stabilization in China, where sales of construction equipment have fallen from a peak of 435,070 units in 2011 to a projected 131,345 machines in 2015—a decline of 70% in the space of four years.
“There can be no doubt that 2015 was a tough year for the global equipment industry, due to slowing world economic growth and weak commodity prices,” said Off-Highway Research Managing Director David Phillips. “Unit sales fell to their lowest since the crisis years and the drop in the Chinese market was particularly brutal. However, there were improvements in several developed countries that helped offset some of these losses.”
The gradual improvement in Europe, which began in 2014, is expected to continue this year, with unit sales rising from a provisional 125,705 units in 2015 to 130,503 machines. Similarly, the buoyant North American market should rise an additional 4% to 186,025 machines.
Continued steady improvements are expected in the Indian construction equipment market, with unit sales expected to rise to 46,414 machines, compared to 38,554 in 2015. Meanwhile in China, the market is expected to show an uptick of around four per cent, with sales stabilizing at 137,820 units.
In Japan, construction equipment sales are expected to fall from 79,998 units in 2015 to 73,825 machines in 2016. The key drivers of this are a tailing-off of reconstruction work following the 2011 earthquake and Tsunami and the winding down of the government’s economic stimulus programs.
“Off-Highway Research’s forecast is for the start of a gradual return to health in the global construction equipment market in 2016,” Phillips said. “However, as has been the case since the crisis years of 2008 and 2009, business confidence remains fragile, and the uncertain geopolitical outlook around the world could have a negative impact on the sector.”