The demand for construction machinery continue to grow

Jul 13, 2015

World demand for construction machinery is forecast to advance 3.9 percent per year through 2019 to $218 billion, decelerating significantly from the pace of the 2009-2014 period. The Asia/Pacific region, Central and South America, and the Africa/Mideast region are all expected to register above average gains moving forward as construction spending, especially on infrastructure projects, continues to increase in developing countries. More than two-thirds of all additional construction equipment demand generated between 2014 and 2019 will be attributable to China. In contrast, industrialized areas like North America and Western Europe will underperform the global market in large part due to strong sales in 2014 as these countries recovered from the global financial crisis and operators replaced older machines. These and other trends are presented in World Construction Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

Continued growth in construction activity and significant investment in large surface mining projects will help Central and South America recover from the sales declines registered between 2009 and 2014. According to analyst Lee Steinbock, “Demand in the region had dropped largely due to declining sales in Brazil, which purchased a significant amount of new construction equipment in the intervening years in preparation for the 2014 FIFA World Cup and the 2016 Summer Olympics.” Increased surface mining activity and rising construction expenditures of all kinds will help drive construction machinery demand in the Africa/Mideast region. Sales of equipment in Eastern Europe are expected to slow from the 2009-2014 period but still grow roughly in line with global demand.

Demand for excavators and loaders is expected to advance at the fastest pace of any major construction machinery product segment through 2019. Sales of these products will be fueled by rising construction and surface mining activity. Increased infrastructure spending will help support advances for graders, mixers, pavers, rollers, and related equipment, while rising residential building construction spending, particularly in urban areas, will help drive new crane sales. Although demand for dozers and off-highway trucks will expand at the slowest rate of any major product category through 2019 -- in large part due to strong sales growth from 2009 to 2014 -- increased surface mining activity will help support gains for these machines.

© 2015 by The Freedonia Group, Inc.

Source: Investorideas.com