Page 16 - January_2023

COVER STORY

Gaining Strength year-on-year Earthmoving, Material Handling, Material Processing and Concrete
Construction equipment (CE) industry volumes dropped by 60% in equipment contributed to the growth, except for the road
Q1FY2021 because of Covid 1.0 and aligned restrictions. However, construction equipment which witnessed a negative growth of
with the government’s focus on infrastructure sector, demand 36% during this period. “Though industry’s performance has been
picked up again, and the industry reported a 13% increase in better in the current financial year so far, worries continue to remain
volume for FY2021, supported by a strong increase in volume on the road construction front, which is the single largest end-user
during H2FY2021. After having one of its best quarters in terms of segment for us,” said Dimitrov Krishnan,
volume in the fourth quarter of FY2021, the Indian construction President, ICEMA & MD, Volvo CE India.
equipment industry faced multiple headwinds in FY2022. During “Despite the subdued performance of the
the first quarter of fiscal year 2022, the volume of the industry was road construction equipment segment,
impacted by restrictions related to Covid 2.0 and a temporary the industry sold an aggregate of 22,941
slowdown in road construction. Demand units during July to September this year, as
also slowed because OEMs raised their compared to 21,323 units sold during the
prices to offset higher costs caused by same period of last year.”
changes in emission rules and higher prices On a quarter-on-quarter basis, the sales in the second quarter
for inputs, whereas rentals of CE operators remained around the same level as of the first quarter. This is
remained flattish, thereby exerting pressure primarily because of the lower month-on-month sales growth
on the income of CE buyers. According recorded during July and August this year. The industry witnessed
to Mayank Agrawal, Assistant Vice President & Sector Head, a strong rebound in September, with sales recording a 45% growth
ICRA Ltd., “ICRA’s outlook on the CE industry remains stable in over August 2022. The growth was mainly driven by Earthmoving
the backdrop of the government’s policies and programs for segment, accounting for nearly three-fourth of the total sales,
the infrastructure sector, with its capex being a key driver for the which witnessed 46% jump in sales during September over
Equipment industry.” August this year, followed by concrete equipment witnessing 62%
A recent Indian Construction Equipment Manufacturers Association growth and 33% in material handling equipment. The CE industry
(ICEMA) report highlighted that the Indian construction equipment sold 4,036 units of Backhoe Loaders and 2632 units of Crawler
sales in the second quarter of the current fiscal (Q2 FY23) grew Excavators in September 2022, an increase of 52% and 43% YoY,
8% YoY and 12% over Q1 FY21. All the sub-segments including respectively.

16 CONSTRUCTION OPPORTUNITIES|JANUARY 2023