“We expect continued above-average growth in emerging regions, especially Asia and South America,” says analyst Lawrence De Maria, who co-heads Chicago-based William Blair & Co.’s global industrial infrastructure group. “We expect Europe to lag North America, but we believe that North America may be surprisingly positive due to strong replacement of an aging fleet, suggesting an attractive profile.”
Many contractors sold off equipment during the market downturn as work became scarce, opting to rent rather than own. Late-model equipment moved quick with oversea buyers paying top high prices amid a weak dollar. Ritchie Bros. Auctioneers Inc., Vancouver, reports $2 billion in gross auction proceeds for the first half of 2011, 16% more than last year, and the largest six-month haul in company history.
“There is big demand to provide rental equipment for North America. There is still a degree of uncertainty, and renting provides flexibility,” says John Crum, national sales manager of Wells Fargo Equipment Finance Inc., Dublin, Penn. “Overall, new equipment sales are up in North America, spurred by replacements and upgrades.”
Terex Corp. booked $1.5 billion in second-quarter sales, up 37.8% from a dozen months prior, driven by strong demand for material handlers, compact equipment and increased truck demand in North America, among other places, the Westport, Conn.-based company said in a statement.
Deere & Co. experienced similar results with $904 million in second quarter earnings, or 65% more than a year ago, as construction equipment shipments increased in spite of lingering residential and commercial market weakness.
"Markets for construction equipment in the U.S. are in the early stages of recovery," said Deere Chairman and CEO Samuel Allen in a statement. "We're optimistic about the longer-term opportunity for further improvement in these and other key areas."