Construction Machinery Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 687 construction machinery manufactures in the US produce a wide range of products, but common types include backhoes, excavators, loaders, concrete mixers, dredging equipment, jack hammers, cranes, augers and drills, pile drivers, and paving machines, as well as attachments and replacement parts. Key customers include construction machinery dealers and rental firms, construction companies, farms, government, waste and recycling firms, and landscapers.
Competition from Used Equipment
Construction equipment manufacturers compete for sales against used equipment.
Dependence on Economy and Construction Activity
Construction machinery sales tend to shrink during economic downturns when building slows and during periods of high interest rates that make financing high-ticket items less favorable.
Industry size & Structure
A typical construction machinery manufacturer operates out of a single location, employs 108 workers, and generates about $51 million annually.
- The construction machinery manufacturing industry consists of about 687 companies that employ 74,500 workers and generate $35 billion annually.
- Customer industries include construction machinery dealers and rental firms, construction firms, farms, landscaping companies, government, waste and recycling operations, and home improvement stores.
- The industry is highly concentrated with the eight largest companies representing 62% of industry revenue.
- Large companies include Caterpillar, Case, John Deere Construction, Doosan, Hitachi, Hyundai, Kubota, and Volvo Construction. Firms also produce equipment used in agriculture, forestry, mining, and drilling.
Industry Forecast
Construction Machinery Manufacturers Industry Growth
Recent Developments
Jan 8, 2025 - Construction Spending Flat
- The total value of construction put in place was unchanged in November compared to October, according to the US Census Bureau. Spending on nonresidential projects decreased by 0.1%, and residential spending rose by 0.1%. Within the nonresidential segment, pockets of spending growth included conservation and development, which saw growth of 9% over the previous month, followed by communication (+0.8%), sewage and waste disposal (+0.4%), highway and street (+0.2%), and power (+0.2%). Most other nonresidential segments saw flat or reduced spending in November. Private residential construction spending rose 0.1% in November over October, but a 1.3% drop in multifamily nearly offset a 0.3% increase in single-family spending. High mortgage rates may be putting downward pressure on construction activity, according to Reuters.
- US equipment rental revenue, which includes the construction/industrial and general tool market segments, is expected to rise in 2025 but at a slower pace, according to a recent forecast by the American Rental Association (ARA). After posting revenue of $78.2 billion in 2024, equipment rental revenue is expected to increase by 5.7% in 2025 and reach $82.6 billion. However, revenue growth is forecast to slow somewhat amid slower infrastructure and manufacturing spending as funding from the Infrastructure Investment and Jobs Act, the CHIPS Act, and the Inflation Reduction Act has peaked and begins to wind down. A bright spot is the general tool rental segment, which should see steady demand from improvements in the automotive and aerospace industries and gradual gains in housing, especially in the remodeling market. Equipment rental activity is a demand indicator for construction machinery manufacturers.
- Demand for building design services dipped slightly in November from the prior month, but there are signs that the architectural services market is gradually improving, according to a December report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 49.6 in November from October’s reading of 50.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries was 54.1% in November, unchanged from the October reading, and the index for the value of new design contracts increased from 45.3 to 48.3. The steady rise of new project inquiries is a positive signal of future business opportunities. However, architecture firms are unlikely to see a significant uptick in design activity soon as new design contracts fell for the eighth consecutive month in November.
- Caterpillar’s third-quarter sales declined 4% compared to Q3 2023, according to the company’s most recent quarterly earnings report. The company’s Construction Industries segment saw Q3 2024 sales fall 7% year over year amid weaker demand from dealers and difficult comparisons to the segment’s results in Q3 2023. Among Caterpillar’s geographic market segments, Latin America was the only region to post revenue growth in Q3 2024, with a rise of 12%. The company’s North American sales were down 11%, while the Europe, Africa, and the Middle East segment saw a 15% decline. Revenue in the Asia Pacific region was off by 12%. While Caterpillar’s CEO said the company expects its Construction Industries segment to struggle in the fourth quarter, long-term prospects are positive amid ongoing funding for infrastructure projects through the Infrastructure Investment and Jobs Act.
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