Equipment boom

25 April 2008

John Reid is president of Australia's Construction & Mining Equipment Industry Group.

John Reid is president of Australia's Construction & Mining Equipment Industry Group.

Australia's construction and mining sector are currently booming and both industries are confident that the growth will continue through until at least 2008. Construction & Mining Equipment Industry Group (CMEIG) president John Reid is also positive about the prospects for the country's equipment sector.

By global standards Australia's construction and equipment market is fairly small with just over 10000 units sold each year, but most manufacturers consider Australia to be an important test market and the volume is growing. Equipment sales are already benefiting from growth in the construction and mining sectors with double digit sales growth for most types of equipment during the last year.

“Sales of compact excavators and articulated dump trucks grew by +39% and +38% in the 12 months to September,” said Mr Reid. “The increase in engineering construction work and road tunnel schemes has helped to boost demand.” Increased sales were also recorded for hydraulic excavators (+24%), motor graders (+29%), wheeled loaders (+17%), rigid dump trucks (+16%) and crawler dozers (+3%).

“While there has been strong growth in the engineering construction and mining sectors over the last year, the residential market has stagnated slightly and is reflected by a slight decline in the sale of backhoe loaders (-3%) and skid steer loaders (-1%),” said Mr Reid. “We are expecting the boom in engineering construction and mining to maintain these record high levels of equipment sales well into 2006, despite a continued slow down in the housing market.”

Cmeig was established in 2003 to bring together Australia's numerous regional and industry associations and give more political muscle and influence on equipment related issues and initiatives.

“The employment and training working group is one of the most important elements of our work at the moment,” said Mr Reid. “There is currently a real shortage of skilled operators and service mechanics. Many companies have experienced difficulties recruiting the right staff for logistics and sales positions too.”

According to Mr Reid, CMEIG's engineering working group is another important one. “The group has been proactively working with Australian Standards to develop new standards for a variety of issues including safety and emissions,” he said. “The group has also been working with manufacturers and dealers to ensure that all machines imported into Australia are labelled in English.”

CMEIG has been closely involved with moves to adopt Tier 3/Stage IIIA engines in Australia and the regulations look set to become mandatory within the next year. “Tier 3 engines not only produce less emissions but are also fuel efficient which is a good selling point on its own,” said Mr Reid. “Many bigger customers are already asking for Tier 3 compliant machines.

Mr Reid has played a key role in getting CMEIG to where it is and has spent the last few months working on a strategy for the next three to four years but remained tight lipped on exactly what they are. The plans will be unveiled at the association's AGM in March when Mr Reid plans to step down from the president's position but he added, “I am planning to stay involved in CMEIG but it's time for someone else to take the lead.

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