Analysis: Results point to US surge and Chinese recession

By Chris Sleight31 July 2012

Financial results from the world's largest construction equipment manufacturers point to a continued recovery in the North American market, but on-going problems in China.

Caterpillar saw a +42% rise in construction equipment sales in North America in the second quarter of the year, with revenues coming in just shy of US$ 2 billion. Volvo meanwhile saw sales rise +89% to US$ 585 million in North America. The company says it expects market growth in of between +15% and +25% in the region this year.

Japan's Hitachi and Komatsu meanwhile report on 'The Americas' as a region, comprising both North and South America. Hitachi's sales to both continents were up +86% on last year in the first quarter of its fiscal year, which corresponds to the April to June second quarter of the financial year. Komatsu's gains in the region were more modest, at +18%.

And there is evidence of increasing sales for other types of construction equipment in North America. Outside of the earthmoving sector, Terex said it saw improving demand for all terrain cranes in the second quarter of the year, and that North America was one of the key drivers in the continued strength of its Materials Processing division (crushing & screening equipment). It also confirmed an on-going fleet replacement programme among US rental companies, which helped to drive a +25% rise in sales of its Genie products in the second quarter.

Chinese recession

In China, the major international manufacturers, most of which focus on the excavator market have seen heavy falls over the last year. Both Hitachi and Komatsu reported revenues in China almost halving compared to a year ago. Kobelco did not report specifically on China, but said the difficult market had seen overall revenues from excavator sales come in -18% lower than a year ago.

Volvo meanwhile has predicted the Chinese market will fall as much as -25% over the course of 2013. Volvo's sales in Asia from April to June were level with the second quarter of last year, which it attributed to falls in China and growth elsewhere.

Caterpillar meanwhile saw its Asia Pacific sales rise +25% compared to a year ago. However, this was due to a +110% surge in revenues from mining equipment. The construction equipment part of its business was down -11%.

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