India’s construction equipment industry turned in its best ever performance with 26% year-on-year growth in FY23 as sales crossed the one lakh unit mark driving on road construction and railway demand.
Sales in fourth quarter of FY23 increased by 23% y-o-y and by 22% quarter-on-quarter over Q3FY23. On a month-on-month basis, sales in March 2023 increased by 17% over February 2023, said a latest report by industry apex body Indian Construction Equipment Manufacturers’ Association (ICEMA).
Growth in FY23 was driven by all four sub-segments of CE industry, except road construction equipment, which recorded slight de-growth of 3% said the report. In terms of product segments, a total of 77,164 units of earthmoving equipment were sold in FY23 – up 23% over the 62,629 units sold in FY22.
The sales of backhoe loaders and crawler excavators, accounting for over 90% of total sales of earthmoving equipment, increased by 28% and 17% respectively during the year.
Similarly, concrete equipment sales went up by 26% to 11,787 units in FY23 on the back of an equivalent increase in sales of concrete mixers which contributed around 60% of sales in this segment, said the report.
Material handling equipment segment recorded a 47% jump, driven by a 25% surge in sales volume of pick and carry cranes, accounting for more than 80% of the total sales in this category.
Tele-handler sales also more than doubled in FY23 while the material processing equipment segment consolidated its contribution to total sales with sharp growth in screeners, jaw crushers, impact crushers and cone crushers.
“The growth comes on the back of the enhanced pace of construction and mining activity during the year which resulted in a significant increase in demand for all types of construction equipment,” said Dimitrov Krishnan, president, ICEMA, and MD Volvo CE India. It is estimated that road and highway construction was about 30 km/day during FY23, which created demand for machines like excavators, motor graders, crushers & screeners, etc. “The support from the ministry of road construction & highways (MoRTH) has been driving the demand for construction equipment as over 40% of CE demand originates from this segment.”
Besides road and highway sector, a steep increase in railway construction in FY23 clocking 14km/day of track laying owing to commissioning of new lines, doubling and gauge conversion and others, enhanced focus of the state governments towards traditional infrastructure development and the steady revival of the real estate industry were the other factors that resulted in higher demand. Also a 15% increase in coal production in FY23 led to higher sales of mining equipment like high-capacity excavators, motor graders and dozers.
“FY23 saw volumes peak to the best-ever performance, with the industry sales volume exceeding the pre-pandemic level by 10%,” said V G Sakthikumar, convener, ICEMA industry analysis and insights panel and MD Schwing Stetter India