The latest report from the US-based 1100 Association of Equipment Manufacturers, AEM, makes for sobering reading. For the first six months of 2015, US exports of construction equipment dropped by 17% compared with the same period in 2014. The US manufacturers have been hit doubly, first by a tough international market and secondly by the high value of the US Dollar.
The slowdown in the Chinese market has had far reaching implications for the global construction equipment sector and this impact is continuing.
Those manufacturers based in countries with comparatively strong currencies like the US (or indeed the UK) have been hit hard. For US firms used to exporting large quantities of equipment north of the border to neighbouring Canada, the decline in sales has been significant, having fallen 12% to $3.1 billion. The drop in sales to the south with neighbouring Mexico has fallen even further, dropping 22% to $602 million.
Countries relying heavily on the extraction sector and exports of mined materials to China, such as Australia and Brazil, have been particularly hard hit after years of growth. This can be seen in the slump in equipment exports in the US, with a fall of 9% to Australia to $387 million and dropping 25% to Brazil to $268 million. Overall sales of US made construction equipment into South America have dropped 23% to $990 million, and by 21% to Central America to $748 million.
Overall, sales of US equipment to Africa fell by a marked drop of 44% to $385 million, with a drop of 14% to Europe to $878 million and 11% for Asia, to $923 million. Notable was the drop in US sales to China, down 26% to $140 million.
The AEM’s director of market intelligence, Benjamin Duyck, commented that the second quarter of 2015 was the 10th quarter that US machine exports dropped and the seventh quarter that imports of machines to the US increased. He explained that the strength of the US Dollar has had a major effect in this respect, as has the drop in investment in many developing nations.
But by comparison, some European construction equipment manufacturers in the Euro zone have been doing rather well, perhaps ironically with the US becoming a key market. In the road construction equipment market in particular, European firms have been able to take advantage of the low value of the Euro and from demand for road machinery buoyed up by a resurgence of road repair and construction activity in the US. With countries in the Middle East also relying heavily on the US Dollar, equipment buyers in that region have also shifted some purchasing to quality European brands available at competitive prices.
Worldwide, the road machinery segment is perhaps one of the brightest sparks in the construction equipment market, with serious activity ongoing in road construction around the globe. Western manufacturers (and of road machines in particular) with factories in China have also been able to capitalise, increasing market share to the local market. Those customers in China with budgets to spend on new equipment have been keen to buy the higher quality western brands made in China, because the products typically have a higher residual value.
The slowdown in the Chinese market has had far reaching implications for the global construction equipment sector and this impact is continuing.
Those manufacturers based in countries with comparatively strong currencies like the US (or indeed the UK) have been hit hard. For US firms used to exporting large quantities of equipment north of the border to neighbouring Canada, the decline in sales has been significant, having fallen 12% to $3.1 billion. The drop in sales to the south with neighbouring Mexico has fallen even further, dropping 22% to $602 million.
Countries relying heavily on the extraction sector and exports of mined materials to China, such as Australia and Brazil, have been particularly hard hit after years of growth. This can be seen in the slump in equipment exports in the US, with a fall of 9% to Australia to $387 million and dropping 25% to Brazil to $268 million. Overall sales of US made construction equipment into South America have dropped 23% to $990 million, and by 21% to Central America to $748 million.
Overall, sales of US equipment to Africa fell by a marked drop of 44% to $385 million, with a drop of 14% to Europe to $878 million and 11% for Asia, to $923 million. Notable was the drop in US sales to China, down 26% to $140 million.
The AEM’s director of market intelligence, Benjamin Duyck, commented that the second quarter of 2015 was the 10th quarter that US machine exports dropped and the seventh quarter that imports of machines to the US increased. He explained that the strength of the US Dollar has had a major effect in this respect, as has the drop in investment in many developing nations.
But by comparison, some European construction equipment manufacturers in the Euro zone have been doing rather well, perhaps ironically with the US becoming a key market. In the road construction equipment market in particular, European firms have been able to take advantage of the low value of the Euro and from demand for road machinery buoyed up by a resurgence of road repair and construction activity in the US. With countries in the Middle East also relying heavily on the US Dollar, equipment buyers in that region have also shifted some purchasing to quality European brands available at competitive prices.
Worldwide, the road machinery segment is perhaps one of the brightest sparks in the construction equipment market, with serious activity ongoing in road construction around the globe. Western manufacturers (and of road machines in particular) with factories in China have also been able to capitalise, increasing market share to the local market. Those customers in China with budgets to spend on new equipment have been keen to buy the higher quality western brands made in China, because the products typically have a higher residual value.
