According to KHL, the global construction equipment market saw some improvement in mature markets such as North America and Europe in 2014, and a decline in emerging markets, most notably China. Emerging markets struggled as a result of the downturn in the mining industry, as many developing countries rely on the extraction and export of raw materials for their economic growth2.
Overall, the Top 50 saw their combined revenues fall -2.6% in 2014 to US$159 billion, compared to a drop of -12.2% in 2013. According to KHL, this deceleration suggests that the construction equipment industry may be slowly recovering from the downturn and returning to growth3.
Nevertheless, combined revenues for the Top 50 in 2014 were 15% below the peak of US$186 billion in 2012, and not yet back to the pre-crisis high of US$168 billion in 20084.
Although the industry is slowly improving, weak market conditions in China and other emerging markets, reduced activity in the global mining industry, and currency fluctuations have affected the financial performance and placement of many of the companies on the list.
Here’s a look at the world's top five construction equipment manufacturers, as published in the 2015 Yellow Table ranking:
1. Caterpillar (U.S.) - 2014 rank: #1
Caterpillar retained its 13-year reign at the top of the Yellow Table, despite a drop in construction equipment revenues from US$31.1 billion in 2013 to US$28.3 billion in 2014. As a result, Caterpillar experienced a 1.2% drop in share of the revenue of the Top 50, down to 17.8%, still significantly higher than second-placed Komatsu’s 10.6%.
Caterpillar has the largest share of the mining equipment market; as a result, the Yellow Giant has been particularly affected by the weakness in the global mining industry
5.
2. Komatsu (Japan) - 2014 rank: #2
While
Komatsu retained the no. 2 position for the 13th year straight, the Japanese manufacturer became more price competitive against
Caterpillar in 2014 due to the 20% decline in the yen against the US dollar6. Since 63% of its assets are located in Japan,
Komatsu is able to manufacture and sell its products at a lower cost than US-based Cat
6.
Nevertheless, like Caterpillar, Komatsu saw its revenues drop year-over-year, from US$17.6 million in 2013 to US$16.9 billion in 2014.
3. Hitachi Construction Machinery (Japan) - 2014 rank #4
Like
Komatsu, the fluctuations in the Yen benefited Japan’s
Hitachi in 2014 and allowed the manufacturer to switch places with
Volvo and inch into the top three on the Yellow Table
2. While
Hitachi and
Volvo both had US$7.8 billion in sales and 4.9% of the Top 50’s combined revenues,
Hitachi earned US$5 million more in revenue which put the Japanese manufacturer in the no. 3 spot.
4. Volvo Construction Equipment (Sweden) - 2014 rank #3
A 0.1% drop in Top 50 market share from 5.0% to 4.9% took
Volvo Construction Equipment from the no. 3 spot in 2014 to the no. 4 spot this year. Volvo’s sales increased in North America and Europe but declined in Asia, South America and elsewhere, resulting in an overall drop in revenues from US$8.1 billion in 2013 to US$7.8 billion in 2014
7.
5. Terex (U.S.) - 2014 rank #6
Terex is the only manufacturer in the top 5 whose revenues improved between 2013 and 2014, up 3% from US$7.1 billion to US$7.3 billion.
Terex’s share of Top 50 revenues increased by 0.3% to 4.6% in 2014. Terex attributed this growth to improvements in its material handling and construction equipment divisions; cranes and aerial work platforms delivered disappointing results
8.
Construction equipment outlook for 2015
Since the global economic downturn of 2008, the global construction equipment industry has been on a “rollercoaster ride,” commented Chris Sleight, editor of International Construction, introducing the 2015 Yellow Table rankings."
Stimulus spending and a boom in China fueled growth between 2009 and 2012. But since 2012 the construction industry has fallen into a downturn due to the sudden decline in China, subdued economic growth in other emerging economies, low commodity prices and a weak global mining industry9.
Mr. Sleight advised: “if the industry is to return to growth, the key ingredients would seem to be an improvement in emerging construction markets, and a rebound in commodity prices.”
Mr. Sleight appeared positive about the next few years for the construction industry: “My expectation is that global markets will improve this year, and in the subsequent years, and that life will become a little more conventional and predictable. But I don’t know what ‘normal’ will look like in the global equipment industry. Maybe there’s no such thing."9
International Construction Editor Chris Sleight gives an in depth analysis of the top 10 construction manufacturers on the 2015 Yellow Table in this video:
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1. “Equipment top 50,” International Construction, April 2015, pp 13-16:
http://www.khl.com/magazines/international-construction/detail/item106684/VIDEO:The-2015-Yellow-Table2. International Construction, April 2015, p16:
http://www.khl.com/magazines/international-construction3. International Construction, April 2015, p16:
http://www.khl.com/magazines/international-construction4. International Construction, April 2015, p6:
http://www.khl.com/magazines/international-construction5.
http://www.bloomberg.com/news/articles/2014-07-24/caterpillar-raises-forecast-quarterly-sales-disappoint6.
http://www.bloomberg.com/news/articles/2015-03-11/caterpillar-faces-aggressive-komatsu-fueled-by-yen7.
http://www3.volvo.com/investors/finrep/ar14/eng/constructionequipm/introduction.html8. “Terex Announces Fourth Quarter and Full Year 2014 Results and Provides 2015 Outlook,“
http://www.terex.com/en/investor-relations/9. International Construction, April 2015, p3:
http://www.khl.com/magazines/international-construction
