Global sales of construction equipment set to drop 16%

A new report by market research and forecasting firm Off-Highway Research has predicted that global sales of construction equipment will fall in nearly every country this year as a result of the coronavirus pandemic. The sector is set to see a drop of 16%, thought the report says the situation would be much worse were it not for China.

Stimulus spending packages implemented by the Chinese government are set to give the market a much needed boost of an expected 14%, bringing sales in the country to the highest levels since the last spending boom in 2010-2011. Before the outbreak of Covid-19, it was expected that Chinese sales would fall this year as the market passed its  cyclical peak.

Off-Highway Research managing director, Chris Sleight, said, “The Chinese market has seen remarkable growth since April and this will certainly cushion the blow as far as the global industry is concerned. We are forecasting a soft landing in 2021, but we are also mindful of the long and painful recession which followed the 2010-11 stimulus boom. I hope the lessons from history have been taken on board.”

Taking out China from global figures, the impact of Covid-19 is much bleaker. Sales will be down 27% this year in the rest of the world, compared to 2020. This would take volumes to their lowest since 2010. However, Off-Highway Research said that it expects growth to return in 2021.

“These forecasts are based on two key assumptions,” said Sleight. “First, we assume the worst of the Covid-19 pandemic is behind us and that, if there is a second wave of infections in the Northern Hemisphere winter, actions to address it will be much more targeted than a blanket lock-down.

“Second, we assume that the policy response from governments around the world will remain intelligent and supportive. Viable businesses must be helped through the current difficulties, jobs must be protected and we now look for stimulus spending to reinvigorate economic growth.”

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