Record High Equipment Sales

There was a 23% increase in construction equipment sales across North America in 2021. According to several surveys, around 295,000 machines were sold last year, marking a record high for the American and Canadian construction equipment market. According to the managing director of off-highway research Chris Sleight, one of the driving factors behind this increase in sales is the red-hot residential building market. Smaller machinery, especially, like compact track loaders and mini excavators saw an increase in sales due to the residential market.

Sleight is of the opinion that, while the numbers are impressive, there has been a slow but definite shift of consumers toward smaller machinery in the last two to three decades. He further elaborated that if you were to go back to the 1990s, you would find that only about a third of the equipment that was sold could be considered compact, and many of these machines were skid steer loaders. However, today, about 2/3 of the market is compact equipment. Mini excavators have stayed on top of the market since the early 2000s, and in the last decade, compact tractor loaders have also made a place for themselves in construction equipment sales. 

In the near future, off-highway research predicts that there will be more growth of construction equipment sales. In the last couple years, residential construction has seen the most activity. While that still remains a promising market, with the increasing interest rates, it is expected to slow down a bit. Right now, the Infrastructure Investment and Jobs Act (IIJA) is what most contractors are looking forward to as it is providing them and rental companies with much needed confidence to invest in bigger equipment for more dependable work in the future. 

Global Construction Market

The effects of the COVID-19 pandemic were felt throughout the global construction market, but it was not just the North American market that managed to bounce back from the economic downturn of 2020. In 2021, the sales of construction equipment rose 10% globally, reaching a new record of 1.12 million units. Last year, all the major construction markets except China saw growth. 

Sleight also commented on the limited supply of construction equipment available. He noted that the demand for construction equipment is much higher globally than the available supply in the market. A lot of manufacturers have reported that they are sold out for the year. This means that the equipment sales will stay at high levels globally for the rest of the year. 

He also highlighted that there are risks involved as well, such as inflation and the rising interest rates. These factors may end up putting a break on the growth for some time. Even more so, the recent Russian invasion of Ukraine and the ensuing international sanctions have also played a part in making the situation more tense. It is still too early to determine how it will affect the construction equipment industry, but one thing that is for certain is that it would have no positive impact on it.