Construction Machinery Manufacturers NAICS 333120

May 7, 2026 - Deere Expected to Return to Growth in 2026

• Analysts expect Deere & Co to return to modest growth in 2026, with revenue projected to rise about 4% to $47.6 billion after two years of decline, according to Visible Alpha and S&P Global reporting. Gains are expected to come from construction, forestry, and smaller-scale agriculture equipment, offsetting continued weakness in large farm machinery. The small agriculture and turf division is forecast to grow 14.9% to $11.7 billion, while construction and forestry revenue is seen rising 15.2% to $13.1 billion, aided by infrastructure spending and improved utilization. Deere reported a 13% increase in first-quarter sales and indicated 2026 may mark the cycle trough. However, production and precision agriculture revenue is expected to fall 6% to $16.2 billion, as large farmers delay purchases amid low crop prices, high costs, and uncertain trade conditions.
• Caterpillar said that while it continues to monitor macroeconomic risks, demand for construction equipment, engines, and generators remains strong despite geopolitical tensions and higher energy prices, CEO Joe Creed said in a recent call with analysts, according to The Wall Street Journal. The company raised its full-year outlook after reporting higher quarterly profit and revenue, driven in part by demand for power-generation equipment used in AI-supporting data centers. The AI boom is also boosting construction activity across business units. Power and energy sales jumped 22% last quarter, and construction industry revenue surged 38%, helping lift total revenue 22% to $17.42 billion, above expectations. Caterpillar expects low-double-digit growth this year and reduced its tariff cost outlook to $2.2 billion to $2.4 billion.

• North American engineering and construction spending in 2026 is expected to remain essentially flat (0% growth) after declining 1% in 2025, according to FMI’s second-quarter 2026 North American Engineering and Construction Outlook. Infrastructure and data center-driven office construction will lead growth, with office rising 6% (with data centers accounting for half of the growth), sewage and waste disposal increasing 8%, conservation and development up 6%, and power and water supply advancing 4% and 5%, respectively. Commercial construction spending is projected to decline 6% amid continued softness in retail and warehouse construction, while lodging is forecast to fall 4%. Healthcare and transportation construction are expected to increase 2%, while education remains flat, and segments including public safety and manufacturing post slight declines. Residential construction remains constrained by high mortgage rates and affordability pressures, with single-family spending declining 2% and multifamily down about 1% as elevated supply and uneven rent growth weigh on activity. Overall, 2026 reflects a fragmented market, with growth concentrated in infrastructure and data centers, while rate-sensitive private development remains weak.
• US retail construction has fallen to historic lows even as investor demand surges, according to Bisnow. CBRE reported 4.7 million square feet of completions nationwide last quarter, the lowest since CBRE began tracking retail construction completions in 2005. High costs and labor shortages have pressured retail construction. Availability rose 10 basis points to 4.9% in Q1 2026 despite 1.7 million square feet of positive net absorption, as bankruptcies added space back to the market. New development is concentrated in the Sun Belt, led by Phoenix, followed by Dallas, San Antonio, Houston, and Bakersfield, California. Neighborhood and strip centers drove absorption. Meanwhile, institutional investment is accelerating, with major deals and funds targeting retail assets, and US retail property sales volume reaching $66.8 billion in 2025, up 35% year over year.