ConstructionWorX Hard Data
UK market – no clear 2020 vision The CEA’s market analyst, Paul Lyons, provides his insight into what is happening in and around the construction equipment market… Construction equipment sales fell by 6% in 2019 Retail sales of construction and earthmoving equipment in the UK market fell by 12% in the last quarter of the year, compared with the same quarter in 2018. This continued the trend during 2019 of quarterly sales declining at increasing rates through the year compared with 2018. This significant fall in sales in the final quarter of the year resulted in sales for the whole of 2019 showing a 6% reduction on 2018 levels, reaching just over 32,000 units. A decline in sales in 2019 had been expected for some time, after reaching peak levels in 2018 following a number of years of growth. However, the downward path expected in 2019 was added to by the uncertainty caused by Brexit, and also uncertainty regarding the future of some major infrastructure projects, particularly HS2. The graph below shows quarterly sales of equipment on an index basis from the construction equipment statistics exchange *, using Q1 2018 as 100. The fall in sales during 2019 was mainly driven by two of the most popular machine types, mini/midi excavators and
crawler excavators (over 10 tonnes), which showed reductions in sales of 11% and 4.5%, respectively. Strongest sales amongst the high volume equipment types has been experienced by telehandlers (to the construction industry), which showed a 7% increase in 2019. This was a result of very strong sales in the middle two quarters of the year. Analysis of sales by region in the UK market in 2019 showed a very distinctive pattern. Compared with 2018, growth in sales was focused in Scotland, Northern Ireland, Wales and the North East of England. In contrast, most other regions in the south and east of England recorded declining sales. This was particularly the case in London, recording close to a 25% decline in equipment sales compared with 2018. Off-Highway Research will be publishing an updated forecast for equipment sales in the UK market in the coming months. The last forecast published in 2019, anticipated that sales would show a further fall in 2020, with a forecast of a 6% reduction. At this stage, it seems likely that recovery from Brexit/election uncertainty, and a clear outcome for the HS2 project review might not provide any improvement in the equipment market until the second half of the year.
UK exports remained strong in 2019, but beginning to ease back UK exports of construction and earthmoving equipment showed a modest declining trend in the first three quarters of 2019, after peaking in the last quarter of 2018. Despite this, exports in the first nine months of the year were still 6% ahead of 2018 levels, during the same time period, at £2,678 million. A declining trend for exports is consistent with reports of demand falling in many of the major overseas markets last year, after peaking in 2018. The USA remained the top destination for UK exports in the first three quarters of 2019, accounting for 29% of total exports at £767 million. This represented a 3% increase on 2018 levels, when share of exports to the
*The UK construction equipment statistics exchange is operated by Systematics International Ltd. This scheme is run in partnership with the CEA, and allows publication of quarterly bulletins on equipment sales in the UK market.
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