A -5% fall in demand is expected this year but that would still give 2022 the second highest sales volume on record, according to new data from Off-Highway Research.
OHR managing director Chris Sleight said that the combination of low interest rates, stimulus spending on infrastructure and high commodity prices last year was a heady combination for the construction equipment market.
"Residential construction is booming, there is strong demand for equipment from mines and the pipeline of infrastructure work looks solid," he added.
All major markets of the world grew last year, with the exception of China. Some of the most robust growth was seen in North America (up 25%) and Western Europe (up 22%), while emerging markets, excluding India and China, were up 24%.
Sleight said: "Equipment sales in China have moved to a different rhythm to the rest of the world since the start of the Covid pandemic. China quickly put stimulus in place at the start of the global pandemic in March 2020. As a result it saw 30% growth in its equipment sales last year, to take the market to volumes which had not been seen for a decade.
"However, this stimulus push was soon spent and equipment sales started to fall in the second quarter of 2021. Although the downturn was steep, the extremely high volumes of equipment sold in the first quarter had an offsetting effect, and the market as a whole fell only -6% overall in 2021."
The outlook for this year remains upbeat, with further equipment sales growth expected in many countries, again with the exception of China.
"As has been widely reported, demand for construction equipment globally is much higher than can be met by the available supply, while shipping bottlenecks are an unwelcome contributor to long lead times. Many manufacturers report that they are sold out for 2022, so we expect global equipment sales to stay at high levels throughout the year," said Sleight.
However, he added that there are clearly downside risks. Inflation and the prospect of rising interest rates have been factors for several months and could be a brake on growth. More recently, Russia’s invasion of Ukraine and the resulting international sanctions have exacerbated this situation.
"It is too early to say how the geopolitical and economic factors will play out, but there are clearly no positives to draw from such a dreadful situation,” said Sleight.
