2021 could see ‘record high’ sales of construction equipment

Global construction equipment sales in 2020 performed much better than anticipated and the forecast for 2021 and beyond is now better than expected prior to the Covid-19 outbreak, according to market specialists Off-Highway Research.

Continued modest growth in China in 2021, combined with a bounce back in sales in other countries around the world – generally of 5-10% – have the potential to take global construction equipment sales to a record high in 2021.

Off-Highway Research managing director, Chris Sleight said, “The buoyancy is such that the question is not so much whether there will be demand for equipment, but whether manufacturers will be able to meet it. History has shown that a global volume of one million units or more can equate to supply shortages in critical components.”

Prior to the Covid-19 pandemic, the cyclical construction equipment market was expected to fall in 2020 and beyond. The overall decline was expected to be around 5%.

In March 2020, as the pandemic took hold and national lockdowns came into force around the world, it was feared that global markets would crash. Annual declines of 20-40% were anticipated in worldwide equipment sales.

2021 could see strong demand for OEMs, such as Hitachi

However, according to Off-Highway Research, 2020 saw little change in global sales. In fact, the market performed better in the pandemic than it was expected to prior to the Covid outbreak.

The consultant said the most important factor in this performance was the huge stimulus spending in China, which saw the market rise from already buoyant levels of 2019 by a further 30%.

In addition, the downturn in other parts of the world was not as severe as was feared when the lockdowns started. Instead of the anticipated falls of 30% or more, most markets declined by 10-20% and some even grew. The overall fall for the world, excluding China, was 12% in 2020.

The forecast for 2021 and beyond is now generally better than was expected prior to the Covid outbreak. Sleight added that, “It is therefore expected that 2021 will be characterised by equipment supply constraints and long lead times for machines. Off-Highway Research believes these factors are the major challenge to its forecasts and the industry reaching its sales potential, rather than any demand-side impediments.”