Coronavirus: Global equipment industry to lose 4% of total production
Study by Off-Highway Research says effect on production is less challenging than the lower demand expected for rest of the year
Disruptions caused by the Covid-19 pandemic around the world are expected to lead to the global construction equipment industry losing production of 43,000 machines this year, or 4% of last year’s production of 1.07 million units, according to a study by Off-Highway Research.
The specialist market research and forecasting company said lockdowns around the world and factory closures would cost the industry globally, with production suffering more in some key affected markets. The most significant impacts of closures are being felt in Europe, in the major equipment producing countries such as Germany, Italy, France and the UK.
On the other hand, China is now trying to make up for the production lost in the last few months, said the report.
“Factory closures and lockdowns in China cost the industry 6% of its production. Some OEMs didn’t close at all, but most were shuttered for two-six weeks and then had to ramp up production once they re-opened. Activity is now very high as the industry is anticipating some government stimulus and something of a buying spree,” said Chris Sleight, managing director, Off-Highway Research.
The market researcher has already forecast a softening of global demand for equipment even prior to the COVID-19 pandemic, Sleight said, with the industry reaching a peak in 2018 and 2019.
“We were already expecting a decline of 5% or so this year from those record highs. COVID-19 will most likely exacerbate that, but we also expect a strong policy response from governments around the world to reinvigorate their economies. It is too early to put a figure on what the impacts will be.
“As disruptive as the closures and lockdowns are at the moment, I don’t think lost production and supply chain difficulties will be the industry’s main problem this year. The biggest challenge will be adapting to demand in the second half of the year. That will be volatile and most likely lower than the industry has enjoyed in the last two years.”
