Off-Highway Research reports a turnaround in the global construction equipment (CE) market, which is expected to grow 16 per cent this year. The report indicates a 10 per cent growth for the Indian CE market this year, surpassing the previous record high of 54,065 machine sales seen in 2011. Meanwhile, the rating agency ICRA in its forecast has predicted a 13-17 per cent growth of the mining and construction equipment (MCE) sector in India in 2017. However, ICEMA has cut this projection to 5 per cent considering the challenges that the industry has faced and is currently facing the impact of GST. A series of setbacks have caused the CE industry to lose its growth steam. Firstly, the BS-IV deadline of 31 March caused a deadlock as RTOs refused registrations for thousands of tractors and CE vehicles, and the Supreme Court had to clarify that the ban on BS-IV vehicles did not apply to tractors and construction equipment (where Equipment India played a role in providing the clarification to the apex court). Then the disruption caused in June, as the industry de-stocked, was followed by GST rates which sky-rocketed to 28 per cent, making equipment more expensive, causing yet another decline in the curve.
Road construction has gained considerable pace, however, the speed of execution is still way behind the target of 41 km per day set by the ministry for the fiscal 2018. Many road developers and contractors confront roadblocks in procedures such as the land acquisition, approvals from agencies and financing. Though the awarding of projects has improved, execution still needs to pick up to the expected level. This will really push up the prospects of equipment industry. Coal India's plan to invest Rs 8,500 crore as capital expenditure in 2017-18 is good news to mining equipment players. However, the activities in mining is not that encouraging as the government's coal mine auction is getting tepid responses from bidders. Recently, the government has annulled the fifth round of coal mines auction due to poor response from bidders. A steep interest rate cut is a great need for boosting demand. Further, more engines of growth are needed. Apart from roads, railways and irrigation are the other two sectors which can redefine growth for the CE industry.
Ports too, is experiencing consistent growth in India. With a lot of room for further development of port infrastructure in India, port equipment players are keen on this sector. Government has planned many new and existing port capacity expansion projects over the next 20 years. The Cover Story elaborates on the growth trajectory of Indian ports sector and the emerging opportunities for equipment players. Warehousing sector in India is still in its nascent stage when compared to the vast and technologically advanced warehouses in the developed markets. However, with the new trend of bigger and taller warehouses, there is a requirement of more handling equipment, automation and racking solutions. Read the Feature on Warehousing Equipment to know more on this market. Our Focus on Portable Power Solutions brings forth the new products and technologies for construction and mining segments.
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