The sales slowdown in 2015 is generally attributed to the decline in oil and commodity prices, leading to infrastructure projects around the world being stalled. Despite the fall in oil prices continuing to play havoc with the financial markets, Off-Highway Research believes that global sales of construction equipment will grow 3.9% in unit terms in 2016.
This would put the world market at 760,508 machines.
Global unit sales fell more than 10% in 2015 from nearly 818,000 machines sold in 2014 to around 731,000.
In 2016, growth is expected in the European, North American and Indian equipment markets. Off-Highway Research also forecasts a stabilisation 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% over 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 which 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 a further 4% to 186,025 machines. Continued steady improvements are expected in India, 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 upturn of around 4%, with sales stabilising at 137,820 units.
Since the 2011 earthquake and Tsunami, the Japanese market has seen strong growth but is now retrenching again as reconstruction work tails off. Construction equipment sales in Japan are expected to fall this year from 79,998 units in 2015 to 73,825 machines.
Mr Phillips said: “Off-Highway Research’s forecast is for the start of a gradual return to health in the global construction equipment market in 2016. 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.”
Global Unit Sales of Construction Equipment by Region (2010-2019)
* = forecast