A recent A.T. Kearney report states that given the investments planned by the government, infrastructure spending is expected to grow from 7.2 per cent of GDP in 2012 to 9 per cent by 2017. This is likely to spur the demand for mining and construction equipment, and if the industry´s full potential is realised, the result could be a $16 billion to $21 billion industry by 2020. Apart from A.T. Kearney report, there are many other reports (like Roland Berger report, etc), which are projecting high growth for construction machinery in the near future till horizon of 2020. On the other side, according to AEM´s Project Database, globally there are about $7.5 trillion worth of projects under way across all emerging markets, out of which the lion share is from emerging Asia region, especially China and India. However, comparing the activity to the size, the economies of these countries paints a different picture as these high growth markets fall behind the Middle East and North Africa (MENA) and Sub-Saharan Africa (SSA) countries. Looking at the infrastructure industry, which is a main driver behind construction equipment, India is ranked 7th in terms of risk vs. reward. There is a high implied growth and a large industry value in the construction sector, though it falls short in terms of overall country rewards and scores poorly when we look at the overall risks.
The strong expectation for growth is mainly driven by the government´s efforts to attract multi-billion dollar investments in transport, energy, utilities, and urban infrastructure. It´s heartening to witness a ´strong intent´ from the new government towards infrastructural development. The government´s focus on ´ease of doing business´ is an indicator of how the much-awaited growth story is going to unroll. Recent announcements of US companies planning to invest $42 billion in India over the next 2-3 years and China planning to invest $20 billion in India primarily in building the railway infrastructure will give a huge boost to the infrastructure industry. Streamlining of policies and procedures are the major initiatives being taken by the new government for faster execution of infrastructure projects that have the potential to increase the demand of construction equipment in the country. And it is also time for the mega show-bC India-which is expected to witness over 30,000 business visitors and scores of new innovative product launches. The ASAPP Media Information Group is organising the 6th Annual Equipment India Conference on Monday, December 15, which will attract key decision-makers and opinion leaders from the Indian building and construction machinery industry. Unique to the industry, the ASAPP Group is also organising the ´2nd Annual Equipment India Awards´ for the best selling products in over 15 categories.
An extract from Report to Greco can well sum up the indomitable spirit and undefeated hope of man, which can also be attributed to the CE industry. ¨Man hurries, God does not. That is why man´s works are uncertain and maimed, while God´s are flawless and sure. My eyes welling with tears, I vowed never to transgress this eternal law again. Like a tree I would be blasted by wind, struck by sun and rain, and would wait with confidence; the long-desired hour of flowering and fruit would come.¨
For their part, the CE industry has put in their best efforts; taken more than enough risks and is now waiting for the rewards, for flowers and fruits!
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