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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 650 firms in the US that manufacture construction machinery produces 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.

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.

Competition from Used Equipment

Construction equipment manufacturers compete for sales against used equipment.

Industry size & Structure

A typical construction machinery manufacturer operates out of a single location, employs 105 workers, and generates about $49 million annually.

    • The construction machinery manufacturing industry consists of about 650 companies that employ 68,800 workers and generate $32 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
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    May 3, 2022 - Construction Spending Gains Tempered by Headwinds
                                    • An expected uptick in North American construction spending in 2022 will be at least partially offset by several ongoing challenges, including inflation, supply chain logjams, labor shortages, project delays, and economic uncertainty brought on by the war in Ukraine, according to FMI’s second-quarter 2022 North American Engineering and Construction Outlook. The residential and manufacturing subsectors are expected to be the key 2022 growth drivers, while spending is expected to decline in some nonresidential building segments including amusement and recreation, public safety, lodging, office, and education. Infrastructure spending will boost the construction of highways and streets, sewage and waste disposal, and water supply by more than 5%. The communication, healthcare, commercial, and power subsectors will see slower growth between 0% and 5%.
                                    • Russia’s invasion of Ukraine has the potential to make the global semiconductor shortage worse. Two companies in Ukraine – Ingas and Cryoin - produce about 45% to 54% of the world’s semiconductor-grade neon, according to Reuters analysis of the companies’ data and market research firm Techcet. Neon is used in lasers that aid in semiconductor design. Russia produces more than 35% of the world’s palladium, according to Techcet. Palladium is used to manufacture sensor chips and specific types of computer memory. Ingas and Cryoin have ceased all production amid increased attacks by Russian forces.
                                    • Experts believe that the ongoing semiconductor shortage could result in an increase of counterfeit components. Experts are concerned that these chips may pass the eye test and even meet basic quality standards, but they will not have gone through any of the testing processes or reliability criteria that authentic chip manufacturers invest time and money in. "Many frauds occur simply because buyers are being pressured to release funds to hastily-erected web-based chip distributors who just as hastily shut down these websites by the time the promised product is supposed to arrive, destroying any potential for recourse," according to John Annand, an analyst, and director at the enterprise IT analyst firm Info-Tech Research Group.
                                    • Total construction spending increased 0.1% in value month over month on an adjusted basis and 11.8% in value year over year on an unadjusted basis in March 2022, according to the US Census Bureau. Residential construction spending increased 1% month over month and 17.8% year over year in March. Nonresidential construction spending fell 0.8% month over month but rose 5.8% year over year in March.
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