An upward trend for construction equipment
Equipment

An upward trend for construction equipment

Construction equipment demand grew 35 per cent to peak at 98,286 units in 2018 but fell 15 per cent to 83,470 units in 2019. Demand declined a further 12 per cent to 73,595 units in 2020, a much less severe fall than the industry’s expectation at the start of the pandemic. The market mitigated the...

Construction equipment demand grew 35 per cent to peak at 98,286 units in 2018 but fell 15 per cent to 83,470 units in 2019. Demand declined a further 12 per cent to 73,595 units in 2020, a much less severe fall than the industry’s expectation at the start of the pandemic. The market mitigated the impact of COVID-19 well and, despite a severe second wave of the pandemic, registered a 12 per cent growth with sales of 82,218 units in 2021. Numerous factors, such as the National Infrastructure Pipeline (NIP), the GatiShakti National Master Plan for multimodal connectivity, National Monetisation Pipeline (NMP), other government infrastructure programmes, the macroeconomic situation, policies,reforms and challenges, impact the construction equipment market. The industry could not keep pace with the estimated demand at the beginning of the year owing to the interplay of global and local factors. Off-Highway Research estimates that the construction equipment market has remained almost flat in 2022. Crawler and mini excavators, skid-steer loaders and telehandler sales are expected to have grown in 2022; crawler dozers, mobile cranes and wheeled loaders remained flat; and asphalt pavers, backhoe loaders, compaction equipment, motor graders and rigid dump trucks are estimated to have declined.There is a lot of work yet to be done in every infrastructure sector that would require a huge quantity of equipment.Therefore, Off-Highway Research is bullish on sustained demand for all equipment types. The NIP,GatiShakti, NMPand other government infrastructure programmes will drive the demand for construction equipment. However, key challenges for OEMs are the cyclical turmoil and global events that impact demand and create supply chain issues along with higher prices. Based on all foreseeable factors at the moment, the Indian construction equipment market is expected to follow an upward trend in the next five years. Off-Highway Research forecasts the market to grow by 9 per cent to 89,350 units in 2023 but predicts it to fall 7 per cent to 83,350 units in 2024 (the general election is scheduled that year). Nevertheless, it will bounce back with a 9 per cent growth to 90,450 units in 2025 and a further 8 per cent to peak at 97,550 units in 2026. Almost all types of equipment will witness growth, though the market will continue to be dominated by the five most popular products: backhoe loaders, crawler excavators, mobile cranes, compaction equipment and wheeled loaders. Together, these will account for 92 per cent of the market in 2026, with backhoe loaders continuing to remain the largest selling type of equipment but crawler excavators will grow at a faster pace. In addition, the market for mini excavators, skid-steer loaders and telehandlers will expand significantly from current levels. Asphalt pavers, rigid dump trucks, crawler dozers and motor graders will continue to remain within a limited range. The demand for less frequently purchased equipment, such as articulated dump trucks, crawler loaders and wheeled excavators, will be driven by specific orders, and no future pattern can be predicted for them with any degree of certainty. Market dominators 1. Backhoe loaders 2. Crawler excavators 3. Mobile cranes 4. Compaction equipment 5. Wheeled loaders About the author: Samir Bansal heads Indian operations of Off-Highway Research, a management consultancy specialising in the research and analysis of international construction and agricultural equipment markets.

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