According to specialist consultancy Off-Highway Research, global construction equipment sales are expected to grow 16 per cent this year, to 810, 000 units valued at $80 billion.
This is nearly 200,000 units less than the last sales peak of 2011 when more than one million units of heavy machinery were purchased.
Graeme Macdonald, chief executive of JCB, was earlier this year quoted by Financial Times as saying that the privately owned UK group “began to see a pick-up in towards the second half of last year’” and that 2017 started robustly worldwide.
Global unit sales of construction equipment grew last year for the first time since 2011, but only by 1 per cent according to Off-Highway Research.
Although the industry generated total revenue of $70.1 billion last year, the market is 30 per cent smaller in US dollar terms compared with its 2011 peak, Off-Highway’s data shows.
The global equipment market peaked in 2011 on the back of Beijing’s $585 billion stimulus spending programme. However, this boom was followed by a drop in sales which saw market demand fall to 25 per cent of its peak size at the bottom of the cycle in 2015 and 2016.
A driving force of the anticipated growth in 2017 is the replacement of ageing machines bought six to seven years ago that are now coming to the end of their working lives.
China, which accounted for 40 per cent of sales in 2011, is expected to be the key driver of growth this year. Sales of equipment in the Asian country are expected to grow 55 per cent this year on rising demand for all types of equipment, according to Off-Highway Research.
Crawler and mini excavators will be the drivers of growth, representing half of the Chinese market in terms of unit sales.
Sales of crawler excavators will overtake wheeled loaders for the first time in the history of the Chinese market.
“The sudden recovery in market demand is attributed to the large number of new projects that have been given approval to proceed since 2015, when the government decided to strengthen the economy by increasing infrastructure investment,” the company said.
India is also looking strong, with a 10 per cent sales growth forecast this year – continuing the momentum of the 36 per cent growth seen last year.
It is projected that the Indian market will surpass the previous record high of 54,065 machine sales seen in 2011.
In North America, the market is expected to rise 8 per cent to over 170,000 units. This would take it back to levels seen in 2014 and 2015, before market growth was interrupted by last year’s presidential poll.
The European market is expected to grow 2 per cent this year to about 145,000 units – a modest grow that follows an 11 per cent surge in 2016.
A 4 per cent jump in equipment sales is expected in Japan, after a demand slump last year.
Over the long term, Off-Highway Research expects global construction equipment sales to rise to close to 900,000 units by 2021, with a value of more than US$90 billion in today’s terms.