Latest corporate construction equipment results prompt curiosity

A quick look at corporate results for some of the major construction equipment manufacturers paints a somewhat confusing picture of current demand. 178 Caterpillar, the world’s largest manufacturer of off-highway machines and for so long a bell-wether for the construction sector, recently released results showing a drop in profits. 1595 CNH and 359 Volvo CE too have been similarly afflicted with a lower than expected financial performance, perhaps a major factor in Volvo CE's decision to pull out of a joint venture partnership with engine builder Deutz for China. However, in marked contrast both 2300 Komatsu and 1651 Wacker Neuson meanwhile have posted good financial results. Similarly, 236 Hyundai Heavy Industries is in good health, and while much of this is attributable to demand for new shipping the firm’s construction equipment division is performing on track. Privately owned 718 Liebherr recently revealed strong results too, along with other privately held companies, the French 2779 Fayat Group and the German 364 Wirtgen Group, which also announced strong sales.

Looking at the figures a little more closely provides some of the answers at least.

Caterpillar has been hit hard by the fall in the oil price as this segment has provided the company with extensive sales such as to the tar sands operations of Alberta, Canada, as well as to Russia. And the company has also been affected by a drop in mining activity, another of its major business areas. Liebherr is also a strong player in mining traditionally, and while its sales to this segment have fallen, its business in activities in other areas (such as cranes) has been boosted and the company believes the coming year will see a moderate increase in turnover. Meanwhile both Fayat and Wirtgen have benefited from a resurgence in demand for road machinery across a number of international markets. Wacker Neuson too has been buoyed by a resurgence in demand for its range of smaller machines, while 1222 Terex’s various aggregate production businesses are also performing well.

It is worth noting that according to the German manufacturer’s association, the VDMA, turnover achieved by German manufacturers of construction equipment in 2014 grew by 8%, equalling €8.4 billion in total, and, with this, is higher than was originally expected. This amount is about the same as was reached in 2006.

And some contrasts are apparent in the construction equipment sector. It is not immediately clear why Komatsu for instance should be seeing strong sales at the same time as CNH and Volvo CE have seen business opportunities cooling.

Meanwhile Chinese companies are experiencing tougher times than for many years, although the larger companies such as 1170 SANY, 2490 XCMG and 1175 Zoomlion are benefiting from having a broader range of activities, while also looking further afield for sales.

Follow %$Linker: 2 External <?xml version="1.0" encoding="utf-16"?><dictionary /> 0 0 0 oLinkExternal @World_Highways World Highways Twitter false http://twitter.com/World_Highways false false%> on Twitter

Receive tweets of all the latest road construction sector news we post online, the trade shows we are participating in, special offers and updates.
Get following and connect with us – we’re here to answer your questions!