Optimistic outlook for Indian equipment sales

Sales of construction equipment in India are likely to fall by -17% by the end of 2009 to 38240 units, compared to 46092 units recorded last year. However, this will be followed by "strong and sustained growth" for the next five years according to the latest report from Off-Highway Research.

In its Mid-year review and a revised forecast to 2013, the forecasting body said by 2010 sales will grow by +27%, with an expected annual growth rate of +13% thereafter, with total sales reaching around 73500 units by 2013.

Despite an overall decline in sales of construction equipment expected in 2009 some types of machinery are forecast to perform steadily. Sales of asphalt finishers which totalled 879 units in 2008 are expected to grow by + 13.8 % to 1000 units by the end of the year. Meanwhile, sales of compaction equipment which totalled 2905 units last year are expected to remain stable at 2900 units.

Managing director of Off-Highway Research, David Phillips said, "The performance of the construction equipment industry in the first half of 2009 has been marginally better than expected, with compaction equipment and asphalt finishers showing some signs of recovery."

He added the demand for these machines has largely emanated from district and rural roads, whereas a slower demand for motor graders indicates that construction work on motorways is yet to pick up.

Sales of backhoe loaders and mobile compressors, which are forecast to reach 14500 and 2800 units respectively this year, may be higher than originally expected, Mr Phillips stated. However, he added demand for wheeled loaders, currently projected to reach 1850 units, a -27 % decrease compared to 2540 units in 2008, may turn out to be lower and other types of equipment are likely to follow this trend.

Mr Phillips said, "The slowdown in the infrastructure sector appears to be tapering off, but as anticipated, sales of construction equipment in the first half of 2009 are decidedly lower than in the corresponding period of 2008. However, demand is certain to rise in the second half of the year, as the government is taking a series of rapid decisions to enhance the level of economic activity."

This includes a shift of focus from planning, to implementing projects - for example in the road building sector, where work has stagnated for several years - there is now a target to build 20 km of road every day.