Declines Likely to Continue for Most Global Equipment Markets

Annual U.S. Construction Machinery New Orders were down 11.2% in March compared to the year-ago level; declines are due in part to disruptions in construction markets and ongoing recession in the industrial sector. U.S. Farm Machinery and Equipment Supplies were up 0.4% from 1 year ago, though labor disruptions and business closures due to COVID-19 are decreasing demand for equipment.

Quarterly Germany Industrial Production was down 6.4% in March with further declines anticipated. Annual Europe Agriculture Machinery Production was also down 6.5% in March, and annual Production is forecast to decline through the second half of the year.    

READ MORE: Manufacturers Report First Quarter 2020 Negatively Impacted by COVID-19


View the corresponding Equipment Market Outlook charts for more data

NOTE: All data for charts supplied by ITR Economics

Europe Agriculture and Farm Machinery Production [return to nav]
  • Annual Europe Agriculture Machinery Production was down 6.5% in March. Production typically rises from February to March. However, due to COVID-19-related shutdowns, Production contracted this March for the first time in the data history (dating back to 1991).
  • Decline in annual Production is likely to extend into the second half of this year. 
    Europe Agriculture Machinery Production
China Diesel Bus Production [return to nav]
  • Annual Production was 3.8% above the year-ago level despite the nationwide shutdowns.
  • However, the ITR Checking Points™ system suggests that further rate-of-change descent is likely during the next one to two quarters. 
    China Large Diesel Bus Production
U.S. Industrial Production [return to nav]
  • Quarterly U.S. Industrial Production was down 6.9% in April. Diminished demand associated with U.S. and global shutdowns as well as the effects of low oil prices on the U.S. oil and gas sector are driving the worst month-to-month decline in over a century.
  • U.S. Industrial Production is likely to decline through at least the remainder of the year. 
    Us Industrial Production
U.S. Leading Indicator [return to nav]
  • The Conference Board’s U.S. Leading Indicator March-to-April percentage decline was the worst on record. This is the second consecutive month of such decline
  • Decline in the Leading Indicator suggests that business cycle decline in the U.S. industrial sector will extend into at least late 2020.
Us Leading Indindicator

U.S. Private Nonresidential New Construction [return to nav]
  • Quarterly U.S. Private Nonresidential New Construction totaled $109.533 billion in March, up 1.1% from the same quarter 1 year ago.
  • U.S. corporations will be generally weakened by the shutdowns, and significant investment in new nonresidential construction is unlikely this year.
Us Private Nonresidential New
U.S. Construction Machinery, New Orders [return to nav]
  • Annual U.S. Construction Machinery New Orders totaled $32.3 billion in March and were 11.2% below the year-ago level.
  • Disruptions to construction markets and ongoing recession in the industrial sector are contributing to the current decline. Trends in the U.S. Architecture Billings Index suggest decline will extend into at least the second half of 2020.
Us Construction Machinery New Orders
U.S. Farm Machinery Production [return to nav]
  • Annual U.S. Farm Machinery and Equipment Supplies were up 0.4% from 1 year ago.
  • Demand disruptions from COVID-19 closures have resulted in an oversupply of several food products, while labor disruptions have resulted in shutdowns of meat processing plants. These disruptions are decreasing demand for new equipment, which will place downside pressure on Supplies.
Us Farm Machinery
U.S. Total Public New Construction [return to nav]
  • Annual Construction totaled $334.7 billion in March, up 8.2% from last year.
  • Construction was expected to be on the back side of the business cycle in the second half of 2020, and the decline is likely to intensify due to the effects of the double black swan events. 
    Us Total Public New Construction
North American Rotary Rig Count [return to nav]
  • The annual North American Rotary Rig Count averaged 998 in April, down 19.4%.
  • The oil supply-demand imbalance is resulting in falling oil prices, with oil prices trending below breakeven levels. This suggests U.S.-based production will decline, as producers will not be incentivized to continue operations at these unusually low prices. 
    North American Rotary Rig Count
U.S. Defense Industry, New Orders [return to nav]
  • Annual New Orders through March were 5.1% above the year-ago level. The February-to-March increase was normal, suggesting that the recent black swans did not deter overall spending in this market.
  • The ITR Checking Points™ system suggests that Phase B, Accelerating Growth, will likely extend into the second half of the year. 
    Us Defense Capital
U.S. Heavy-Duty Truck Production [return to nav]
  • April U.S. Heavy-Duty Truck Production came in 50.0% below the April 2019 level. This was the worst March-to-April decline on record.
  • Expect an economy weakened by COVID-19 shutdowns and unusually low oil prices to negatively impact investment in heavy trucks this year.
Us Heavy Duty Trucks
Europe Leading Indicator [return to nav]
  • The Europe Leading Indicator March-to-April percentage decline was the worst on record. This is the second such case of decline in as many months.
  • The steep decline in the Leading Indicator suggests business cycle decline in the European industrial sector will extend into at least early 2021.
Europe Leading Indicator
Germany Industrial Production [return to nav]
  • Quarterly Germany Industrial Production was down 6.4% in March.
  • Further business cycle decline is indicated by recent weakness in the stock market, as well as the renewed descent in the Eurozone Purchasing Managers Index and the Germany Leading Indicator.
Germany Industrial Production