The global construction equipment (CE) manufacturers are betting big on China and India to accelerate sales as their growth is hit by slowdown in the US and Europe.
Though the industry staged a modest recovery in 2010 globally, China and India, the two fastest-growing economies have changed the dynamics of the CE industry in the last three years making up for the drop in sales in the developed countries, David C Philips, managing director, Off-Highway Research, a global consulting firm said.
In a presentation on ‘The Changing Structure of the Global Construction Equipment Industry’ at a seminar, organised by the Confederation of Indian Industry (CII) at Excon 2011, here on Thursday, he said though the industry worldwide staged a modest recovery in 2010 from the slowdown in 2008 and 2009, the three nations — China, India and Brazil have shown good growth.
“The global construction equipment industry is witnessing strong winds of change with growth momentum shifting to emerging markets like China and India from mature markets (North America and Europe), where finance has become scarce and business confidence is low,” Philips said.
He said, thanks to China and India, the global construction equipment industry has recovered to project sales revenues of $82 billion in 2011 as against $77 billion in 2010 and $55 billion in 2009 after peaking at $100 billion in 2007.
With revenues declining 50 per cent in the mature markets post-2008 global meltdown due to liquidity crunch and declining demand, the industry has set its sights on the developing countries to push sales revenues to $100 billion in 2013 by meeting their growing infrastructure demand.
Philips said, the global companies are increasingly looking at setting up manufacturing units in India and China in order to cash in on the opportunities coming up in emerging markets.
“India is emerging as one of the most exciting markets in the world,” Philips said, adding the infrastructure deficit across the country would force the government and the industry to put the sector on fast track and attract long-term investments in building and expanding roads, highways bridges, dams, ports, airports, power plants and housing.
Recovery is coming from BRICS countries (Brazil, Russia, India, China and South Africa) as traditional and matured markets (North America and Europe) struggle to grow due to the slowdown and sovereign debt crisis drying up funds, Philips added.
