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Indian Construction Equipment industry sales grow by 31% Y-o-Y, volumes doubles since FY 2014
Articles- Nov 28,23
Indian Construction Equipment Manufacturers Association (ICEMA) shares a quarterly sales report of Indian Construction Equipment industry which showed a growth momentum with increased domestic sales for 27,423 units while 2,655 units were exported.
The Indian Construction Equipment industry continues to be a key enabler of creation of world-class infrastructure in the country, ably partnering the government in its drive for infra-led growth of the nation. The union budget 2023-24 further reiterated the government’s focus on infrastructure development as the engine of economic growth in the country through increased budgetary allocations, including the second highest allocation to Road infrastructure, amounting to 20 per cent of the total allocated budgetary expenditure. This has translated into greatly improved prospects for the CE industry, since road construction accounts for around 40 per cent of the total demand for construction equipment in the country. Further, the current fiscal being an election year, the projects that were already in the pipeline, as well as those that started recently, are expected to be completed well in time, providing added impetus to the growth of the CE industry.
“The 17 per cent increase in budgetary allocation to the infrastructure sector and 15 per cent increase in the budgetary allocation to NHAI are showing encouraging results in the form of pickup in the pace of infra projects. The rapid pace of projects that were in the pipeline, especially in railways as well as the roads and highways sector, has generated spectacular increase in demand for all segments of construction equipment,” said V Vivekanand, President ICEMA and Managing Director, Caterpillar India.
The quarterly sales report, submitted by Indian Construction Equipment Manufacturers Association (ICEMA) for the Indian CE industry, consolidated a positive performance in the current year as CE sales grew by an excellent 31 per cent in Q2 of FY 2023-24, as compared to Q2 of the last fiscal year. The growth in sales during the second quarter of the current fiscal comes on the back of positive growth in all five of the CE industry’s major equipment segments, which are Earthmoving Equipment by 23 per cent, Road Construction Equipment by 65 per cent, Material Handling and Material Processing Equipment by 66 per cent each and Concrete Equipment by 47 per cent. Earthmoving Equipment, which has a 70 per cent share in total construction equipment sales, recorded total sale of 20,669 units, which were primarily comprised of backhoe loaders (11,756 units) and crawler excavators (6,765 units). Pick and carry cranes (3,383 units) constituted the bulk of material handling equipment sales while concrete equipment sales were largely accounted for by concrete mixers (1,990 units).
“We are very pleased with the sales growth in Q2 of the current fiscal and expect the positive trend to continue,” said Jaideep Shekhar, Convener, ICEMA Industry Analysis and Insights Panel and Managing Director – Asia, Australia & EMEAR, Terex India. “In view of the government’s directive to spend 80 per cent of the budget allocation for the infrastructure sector by December 2023, we are confident that this on-going momentum will translate into a 15-20 per cent growth in CE industry sales over the whole of FY24,” he explained.
In the past decade as well the industry sales has seen robust growth. Indian Construction Equipment industry has been on a growth path, with sales volumes more than doubling from 50,000 units in FY 2014 to 107,000 units in FY 2023. The figure 1 depicts the sales volumes of the CE industry in thousand numbers of equipment, from 2013-14 to 2022-23.
Figure 1: Sales volumes of the CE industry
The Indian CE industry recorded exemplary annual results in the previous fiscal, with sales crossing the 100K unit mark for the first time ever and an unprecedented 26% annual growth in sales volumes. Following this, the Indian CE industry’s performance in the current fiscal year has been further bolstered by the government’s continued emphasis on infrastructure in the form of enhanced budgetary allocations, as well as rapid implementation of projects in the run-up to the General Elections. As a result, the overall sales figures for the CE industry in the current fiscal year have been consistently higher than those in FY 2022-23, in terms of both domestic sales as well as exports. Total equipment sales in Q2 24 increased to 30,078 units, against 22,941 units sold in Q2 of FY 2022-23. Of these, domestic sales accounted for 27,423 units while 2,655 units were exported. The graph 1 shows the historical trend of export sales of construction equipment compared with the past year’s trend.
Graph 1: Trend of Export Sales (Source: ICEMA)
ICEMA requests the government to ensure that the steady pace of execution of projects is maintained, to ensure the continued robust growth of the Construction Equipment industry. ICEMA, as the apex body of the CE industry, continues to work towards the growth and advantageous positioning of the industry through stakeholder engagement, consensus building and policy advocacy, added the spokesperson.
Indian Construction Equipment
V Vivekanand
Caterpillar India
Earthmoving Equipment
Road Construction Equipment
Material Handling and Material Processing Equipment
Concrete Equipment
Concrete Mixers
Jaideep Shekhar
ICEMA
Indian Construction Equipment Manufacturers Association
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