Continued weakness in raw material prices, and the still slow pace of many of the world’s economies, again led to a decline in total revenue for the world’s top 50 equipment manufacturers.
In last year’s table, it was noted that sales of construction machinery from half a hundred companies had stood at just over $ 133 billion in 2015, down 16.2% from 2014. The latest fall is less dramatic. In 2016, total sales slightly exceeded US$129 billion, a decrease of 2.3% on the previous year.
The good news is that, according to the analysis of the consultancy Off-Highway Research, the industry has already bottomed out and is predicted to grow 8% this year.
Despite this, many large companies are still experiencing a tough market, and one of them is the largest manufacturer of construction equipment in the world, Caterpillar.
Aside from the humiliation of seeing its offices raided recently by US federal agents, following accusations of tax evasion, the US giant suffered a blow in 2016 with a 1.6% reduction in sales, which fell from US$24.12 billion in 2015 to US$21.34 billion in 2016. Nonetheless, the company remains ahead of all competitors in terms of sales volumes.
There is an intriguing move at the top of the table, the most significant of which comes from Sandvik, which came in tenth, jumping from 30th place in the previous year. The reason for this is a transformation of the firm’s business structure as it merged its mining and construction operations to create Sandvik Mining and Rock Technology. The new structure came into effect on July 1 of last year, having an extremely positive effect on the revenue figures recorded by the table.
Another surprising jump is that of Terex, which fell to ninth place in the list, when in the previous edition it was the third largest company. This is the result of the company’s sale of its materials handling and port solutions business to Finnish rival Konecranes for US$1.3 billion in 2016. The movement in Terex revenues could have been even more dramatic if the proposed sale of the company to the Chinese manufacturer Zoomlion had gone ahead.
In the Top 10, a strong mover is the Korean firm Doosan Infracore, which rose from the eighth place to sixth this year. Doosan’s success in 2016 is largely due to strong sales to emerging markets, especially the supply of wheeled loaders and excavators to Qatar, Singapore and Myanmar.
In terms of regional market share, US companies lost 2.6%, largely due to the tribulations of CAT and the challenges of Terex, but also to the fall in revenues of John Deere and Manitowoc Cranes. Only Astec Industries appeared to slow the downward trend of the US contingent.
Conversely, Japan’s share in the world market increased by 2%, although much of this gain can be attributed to the strengthening of its currency. Taking an all-year average, the Japanese yen strengthened from an average of 121 yen per dollar in 2015 to 109 yen per dollar in 2016.
China is another country that has suffered a significant loss in its share of world revenue in 2016, from 14.4% in 2015 to 11.5% in 2016. Despite this decrease, it should be noted that of the nine Chinese firms on the list, only one lost ground (LiuGong, falling from 28th to 31st place).
The positions in the Yellow Table are based on sales in US dollars in the calendar year 2016. The currencies were converted into US dollars, based on the average exchange rate throughout 2016. Data was collected from a variety of sources including audited financial statements of companies and other reputable sources.
In Japan, India, and some other countries, the use of the fiscal year (which ended March 31) made it impossible to establish calendar year information. In these cases, the results of the fiscal year were used. In some cases, International Construction has estimated revenue based on historical data and industry trends.
While every effort has been made to ensure that the information contained in this report is accurate, International Construction accepts no responsibility for errors or omissions.
If you would like to comment on the Yellow Table, or you think your company should be included, please email Mike Hayes, editor of International Construction, at email@example.com.
The full Yellow Table report is published in the April edition of International Construction. Click here to register for a FREE subscription to the magazine in print and digital formats
Further information from KHL