The Farm and Construction Machinery industry has shown signs of recovery. With the U.S. manufacturing industry posting its 13th straight month of growth, equipment makers are finding themselves poised for strong profits in the coming quarters as the domestic market for construction equipment rebounds due to lower interest rates and strong commodity prices spurring demand. However, European markets remain depressed as livestock and dairy markets weaken alongside of a large inventory of available used farming equipment.
The major focus of construction equipment makers is the rapidly growing Chinese market. Powered by increasing infrastructure development and a growth in mining operations, the market for construction equipment in China has grown to one of the largest in the world. With demand for wheel loaders up 63% and excavators 84% from last year, many companies including Caterpillar Inc. in the sector are priming themselves for fierce intra-industry competition as they fight over the $20 billion annual market for equipment.
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