Construction equipment sales set for double digit growth

Sales of construction equipment – a barometer of economic activity – are expected to grow in healthy double digits in the ongoing fiscal, driven by increased government spending on infrastructure projects, particularly in rural areas.

The industry estimates that sales of construction equipment (domestic sales and exports) will grow by 15-20% in FY2023, compared to a decline of 8% in the previous fiscal. Even though exports grew 60.5% to 7,802 units in FY22, local sales fell 11.4% to 77,583 units.

Market leader JCB India Managing Director Deepak Shetty said, “In the last fiscal, the industry’s output declined by about 8% due to a fall in demand for road construction and earth-moving equipment.” An increase in economic activity would, in turn, help boost demand for them as well. But the steep rise in input costs and supply chain constraints are a matter of concern, he said.

The central government has budgeted a record Rs 7.5 lakh crore this fiscal with a 36 per cent increase in its capital expenditure, with a special focus on infrastructure development to boost growth. Minister of State for Finance Pankaj Choudhary told Lok Sabha that it has expanded the scope of the National Infrastructure Pipeline to include 9,335 projects (from 6,835 projects at launch), with a total estimated investment of Rs 108 lakh crore during FY 2015-FY25. is Rs. march.

Among other things, plans to provide piped drinking water to rural households, construction of smart cities, launch of new metro rail development projects and construction of new airports in Navi Mumbai (Maharashtra) and Jewar (Uttar Pradesh) are for construction equipment. will accelerate development. industry, Shetty said.

He said that PM Gati Shakti National Master Plan is an important initiative, which will focus holistically on infrastructure development.

He predicted that India would become the second largest market for construction equipment by the end of the decade. India is currently the third largest country for industry after the US and China.

Shetty is also the President of CII EXCON, a construction equipment and construction technology trade fair to be held in Bengaluru from May 17-21. More than 800 exhibitors from 46 countries will showcase their products and technology at the expo. Organizers expect 50,000 business visitors at the five-day event.

Given worldwide regulatory pressure to reduce carbon emissions, manufacturers are focusing on evaluating and developing products powered by green fuels such as CNG, biofuels and hydrogen. In India, work is also underway to deepen the level of localization so as to increase indigenous capacity and manufacturing.

“Some products like backhoe loaders have localization content in the range of 90%. In others the localization level is mostly around 50-60%. MSMEs are working on enhancing their capabilities to strengthen the ecosystem and move up the value chain,” said Shetty.

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