Industry growth

15 April 2008

Revenues for the 50 largest construction equipment manufacturers in the world grew +23.4% last year, hitting a total of US$ 121.9 billion, compared to US$ 99.0 billion a year ago. It is significant that this rate ofgrowth was higher than the figure of +14.7% seen in last year's edition of the Yellow Table (which was based on the change in sales from 2004 to 2005).

With so much growth coming in the two previous years (+31.1% and +18.6%), it seemed likely that the slowdown last year may have marked a turning point in the industry's cycle. However, the robust increase of +23.4% from 2005 to 2006 might suggest this reduced growth was just a ‘pause for breath’.

Over the longer term, growth in the industry has been phenomenal. The first edition of the Yellow Table was published in April 2003, based on 2002 revenues, and that year total sales for the 50 largest companies in the business was just US$ 52.6 billion. So in five years the industry has grown +132%. Another way of looking at this is that the average size of a company in the Yellow Table has increased from US$ 1.05 billion annual sales in 2002 to US$ 2.44 billion in 2006.

There are other statistics that illustrate this growth. For example, in the 2003 edition there were just 12 companies with sales of US$ 1 billion or more. Last year there were 29.

Looking back five years also highlights Caterpillar's seemingly unassailable position at the head of the industry. Even with the remarkable increase in sales since 2002, the 2nd placed company - Komatsu - is only now seeing its sales reach the level of around US$ 11 billion or so that Cat enjoyed back then (US$ 11.9 billion).

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