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The Market is Moving

This is our annual buyers’ guide issue, and as such, it is a good time to talk about the market for construction-equipment sales. This is especially important when you take into consideration that this is a MineExpo year.

There is good news from the field. The Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index, which reports economic activity for the $628 billion equipment finance sector, showed overall new business volume for April was $6.1 billion, up 20 percent from volume of $5.1 billion in the same period in 2011. Volume was down 10 percent from the previous month. Year-to-date cumulative new business volume is up 17 percent.

Sales of construction equipment by the world’s 50 largest manufacturers grew 25 percent last year to $182 billion, according to the annual Yellow Table survey by KHL Group. This was a record for the industry, surpassing the previous high of $168 billion set in 2008, prior to the global financial crisis.

Volvo Construction Equipment’s President and Chief Executive Pat Olney, is one executive that sees that continuing. “Demand for construction equipment in North America jumped 35 percent during the first three months of the year,” Olney said at a press event in Miami. “This shows us that the recovery that began last year is gathering pace and that our earlier forecast of a 15 to 25 percent year-on-year improvement for 2012 is attainable.”

The latest Yellow Table report, which is a ranking of the world’s 50 largest construction equipment manufacturers, saw relatively few changes at the top of the table, with the industry’s long-standing number one and two, Caterpillar and Komatsu, continuing to hold the positions they have had for more than a decade.

Climbers inside the top 10 include Volvo Construction Equipment, Terex, John Deere, and China’s Sany and Zoomlion. Across the top 50, U.S.-headquartered companies accounted for 31.2 percent of total revenues, up from 29.5 percent the previous year.

The report’s author, Chris Sleight, said, “A rebound in the European, North American and Japanese construction markets was the key driver last year. There was also growth for some of China’s larger players, but they faced the first significant headwinds for more than a decade as the country’s stimulus spending programs came to an end. Over the next 12 months the continued recovery in North America is likely to be decisive for the 2013 Yellow Table.”

Mark S. Kuhar, editor
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Member: Construction Writers Association