According to the data of American Equipment Manufacturers Association (AEM), although the global economy will continue to grow steadily in 2022, the construction machinery industry will still face a series of challenges.
According to AEM's latest business intelligence, the global economy will grow by 5.1% in 2021. Although the growth rate in 2022 is expected to be about 3.9%, the slowdown seems to be a foregone conclusion.
Such factors as COVID-19's continued spread, supply chain problems, labor shortage and other long-term factors such as globalization and inflation have restrained investment enthusiasm of capital to a certain extent.
Benjamin duyck, director of market intelligence at AEM, said: "The recession from February to April 2020 caused by the global epidemic has ended the longest period of economic expansion in American history. From the perspective of traditional economics, it is unscientific to describe the situation in these two months by 'recession'. However, the economic turmoil has had a huge impact on all of us, including adverse factors such as labor shortage, supply chain problems and higher interest rates, which are still being eliminated "Change."
According to AEM, although the recent stock market has increased by 20% compared with a year ago and 30% compared with two years ago before the outbreak of the epidemic, such "rise" has not reduced people's concerns about the economy.
In the past two years, AEM regularly surveyed its members to see how long they think the economy will take to recover before COVID-19. Duyck said that for some time, people's feedback was generally quite positive.
"But last quarter's data went in the opposite direction again, mainly because we faced adverse factors such as inflation, labor shortage and supply chain disruption." Duyck said.
The inflation rate of the construction machinery industry has been rising gradually, up 9.7% in the last quarter.
AEM believes that labor force is also an important factor for future economic growth. In its recent quarterly membership survey, 84% of respondents said they had encountered many problems in this specific field.
In addition, the supply chain problem is also an ongoing challenge. More than 95% of AEM members said they were facing problems such as supply chain instability. But at the same time, 44% of respondents pointed out that the problem began to improve. This means that the demand of the supply chain begins to normalize, or the instability of the supply chain is improving.
Supply chain problems are common both in the US and globally, duyck said. AEM's problems are not only related to the price and quantity of raw materials, but also related to the international suppliers and suppliers.
"The imbalance between supply and demand and COVID-19's restrictions almost clean up all inventories, and the lubricant that runs between the global industrial chains has disappeared." Duyck said. "Another analogy that may be closer to our industry is that we are running a machine that runs out of oil and lights, and the machine will continue to run for a considerable period of time until it is scrapped or 'dead'."
Prospect of construction machinery market
In 2022, driven by factors such as housing demand, the value of construction machinery industry is expected to increase by 4.5%.
83% of AEM members said that referring to the estimate that the value growth rate of the construction machinery industry in 2021 was 6% ~ 10% one year ago, it is completely reasonable that the growth rate in the next 12 months will reach or even exceed 6% ~ 10%.
Infrastructure spending will increase significantly in the next few years, but uncertainties associated with COVID-19, high material costs and monetary policy are still worrying.
