Equipment sales soar to record high

Construction equipment sales in North America grew 23% last year, according to specialist market research and forecasting company, Off-Highway Research. At almost 295,000 machines sold, this was a record high for the American and Canadian market.

The North American market seems to have bounced back from the effects of the Covid-induced economic slowdown in 2020

“The red-hot residential building market drove a huge increase in sales of smaller machines last year, particularly compact tracked loaders and mini excavators,” said Chris Sleight, managing director of Off-Highway Research. “By their nature, these are high-volume products, so the numbers are very impressive.”

According to Sleight, the market has undergone a slow but very definite shift toward smaller machines over the last 20-30 years.

“If you went back to the 1990s, only about a third of equipment sold was what you might call compact – a machine weighing about 5-6 metric tons or less. Most of those were skid-steer loaders.

“Fast forward to today and about two thirds of the market is compact equipment. Mini excavators have really topped the market since the early 2000s and in the last 10 years, compact tracked loaders have replaced a lot of skid-steer loader sales, as well as finding new applications and customer groups.”

Looking ahead, Off-Highway Research expects further growth in the next two to three years.

“Over the last two years, all the action has been in residential construction. That still remains a promising market, but obviously the expectation of rising interest rates could put a dampener on that segment. More significant going forward is the [Infrastructure Investment and Jobs Act (IIJA)], which is giving contractors and rental companies the confidence to invest in larger machines for a more dependable future pipeline of work.”

Global context

It was not only the North American market which bounced back from the effects of the Covid-induced economic slowdown in 2020. Overall, global construction equipment sales rose 10% in 2021 to a new record of 1.12 million units. All major markets of the world grew last year, with the exception of China.

“As has been widely reported, demand for construction equipment globally is much higher than can be met by the available supply, while shipping bottlenecks are an unwelcome contributor to long lead times. Many manufacturers report that they are sold out for 2022, so we expect global equipment sales to stay at high levels throughout the year,” said Sleight.

“However,” he continued, “there are clearly downside risks. Inflation and the prospect of rising interest rates have been factors for several months and could be a brake on growth. More recently, Russia’s invasion of Ukraine and the resulting international sanctions have exacerbated this situation. It is too early to say how the geopolitical and economic factors will play out, but there are clearly no positives to draw from such a dreadful situation.”

Results from last year and Off-Highway Research’s updated outlook will be discussed in the company’s Global Off-Highway Briefing webinar on March 29.  More details are available here.