Infrastructure investment and construction activities on ground mainly roads and highways have brought the construction equipment industry on track after a gap of four years. All the international and domestic research companies and industry experts have projected the positive growth in heavy equipment industry.
Recently, Global market research company MarketsandMarkets projected global construction equipment market to reach USD 116.20 billion at a CAGR growth of 4.11% by 2021 and mining equipment market is projected to grow at a CAGR of 6.42% to reach USD 136.03 billion during forecast period.
Increasing number of infrastructural projects, rapid urbanization, robust economic growth and revised government regulations on mining will help construction market in Asia-Pacific region to dominate the market. Key countries like India, China and Japan are estimated to record a highest CAGR during the forecast period, said the report.
Last month, a report released by Off-Highway Research also said Backhoe loader (an Earthmoving machine) sales are expected to increase by over 32 percent in next 5 years on the back of investment in infrastructure. The sale will jump to 28,000 machines by 2020 from 21,192 units sold in 2015.
Indian heavy equipment market shrunk after 2011 when in a single calendar year 52,893 units of construction machines had been sold in Indian market with a growth of 21%, since then until September 2015 sector faced de-growth, only by the end of 2015, the market was recorded flat with a sale of 36,798 units, which started witnessing a revival in October to December 2015.
Mr. Vipin Sondhi, MD & CEO of JCB India told The Hindu newspaper that industry has clocked a growth of over 40% in last six months during January to June period. According to industry data shared by JCB to the newspaper, 21,869 units of construction equipment have been sold in first five months of 2016.
As 21,869 units have already been sold in first five months of 2016, indicates 2016 will end with better growth as compared to 2015, wherein entire year 36,798 units were sold.
As far as reaching a level of 2011, Mr. Sondhi told the paper, that number is likely to touch by next calendar year (2017).
Recently, National Highway Authority of India (NHAI) announced that around 1 lakh crore will be invested in road projects in 2016-17 and while talking about construction equipment industry, it said, sale of construction equipment has grown drastically.
NHAI is having around 250 projects across the country, the investment in the road and highway projects would drastically change the heavy equipment industry in the country, Coal mining activities and cabinet approval for new mineral policy will drive the sector in years to come.
Government has planned a huge investment in airports, ports, smart cities, railways, shipping, urban development, metro railways; all of them will boost the demand of heavy equipment in the country when the project will start rolling back on the ground.
Source: Information has been obtained from MarketsandMarkets, The Hindu and Off-Highway Research