Tag Archives: equipment industry

Economic scenario affecting heavy equipment and construction industry

Every big and small industry is co-related to the economic situation in a country. If the economic situation in a country is favorable for the businesses to flourish, it gives a good time for the people of that country to earn good money. However, if the economic condition is in turmoil then every industry takes a beating. Moreover, if it is the construction industry, it perhaps takes the maximum beating and also industries associated with it. The current scenario is such that market pundits see a modest growth rate in the construction segment. Nothing major can be predicted for the time being. It is better than being slow. However, few heavy equipment manufacturing companies have a different perspective about the current economic scenario. They do not see the market to be modest and feel that it will take more time for the market to improve in order to become modest. This means that the situation is far from being called modest. This shows that there are mixed signals coming from all areas of the heavy equipment manufacturing segment. They are also worried about the overall global situation if not much worried about what is happening inside the country. They ideally look to export their products outside the country and if the overall economy is at its worse, then it becomes very difficult for them to sell their machines worldwide.

Caterpillar being one of the strongest companies in the US has estimated that its total sale in 2014 will be around 55 billion dollars which is somewhat similar to the sales in the previous year. This shows that the heavy equipment market worldwide is indeed appalling and will take time to recover. Industry experts believe that the situation in the year 2015 will be somewhat better but will not show any dramatic upward trend. This means that the industry has to struggle hard for few more years after which it can expect to see a rosy outlook. They see immense opportunities for investment in infrastructure sector in countries like United States, Turkey and India. In addition to this, they also want the government to implement growth oriented policies that could be beneficial to all.

One of the major reasons of slow economic recovery in the global arena is the political conflict and instability. Due to this instability, no proper decisions are getting implemented and investors cannot set up the trust that it has to in order to invest their money. Countries in Africa and in the Middle East are the worst affected countries and they have to do a lot to improve things. Europe may have a different story to tell but it may not be far different. They do not see things to be so negative. However, they also do not see any signs of rapid industrial growth happening anytime soon. A report from CECE reveals that heavy machinery sales in the first half of 2014 increased by 10.24% compared to the first half of 2013. However, the second half was disappointing.