ICEMA annual industry results FY 2022-23 showsvolumes peak to the best-ever performance, with the industry sales volumeexceeding the pre-pandemic level by 10 per cent.

Construction Equipment sales grew 26 per cent tocross 1.0 lakh mark in FY2022-23.

-        Y-o-Y 28.5 per cent growth in domestic sales; 3.0per cent growth in exports.

The Indian Construction Equipment (CE) industryrecorded an excellent 26 per cent growth Y-o-Y with sales crossing the one lakhunit mark in FY2022-23. CE sales in Q4 of FY23 (Jan-Mar 2023) increased by 23per cent over Q4-FY22, and by 22 per cent over Q3-FY23. On a month-on-monthbasis, sales in March 2023 increased by 17 per cent over February 2023.

The significant growth in FY23 was driven by allfour sub-segments of CE industry, except Road Construction Equipment, whichrecorded a slight de-growth of 3.0 per cent. A total of 77,164 units ofEarthmoving equipment were sold in FY23 – a 23 per cent jump in sales ascompared to 62,629 units sold in FY22.

The sales of Backhoe Loaders and CrawlerExcavators, accounting for over 90 per cent of total sales of earthmovingequipment, increased by 28 per cent and 17 per cent respectively during theyear. Similarly, concrete equipment sales went up by 26 per cent to 11,787units in FY23 on the back of an equivalent increase in sales of concrete mixers,which contributed around 60 per cent of sales in this segment. MaterialHandling Equipment segment recorded an impressive 47 per cent growth, driven bya 25 per cent surge in sales volume of pick and carry cranes, accounting formore than 80 per cent of the total sales in this category.

A significant increase in tele-handler sales wasalso witnessed with 713 units sold in FY23, compared to 342 units in FY22. TheMaterial Processing Equipment segment too consolidated its contribution tototal sales with manifold growth in screeners, jaw crushers, impact crushers,and cone crushers.

“The growth comes on the back of the enhancedpace of construction and mining activity during the year, which resulted in asignificant increase in demand for all types of construction equipment,” saidDimitrov Krishnan, President, ICEMA and Managing Director Volvo CE India PvtLtd. “The support from the Ministry of Road Construction and Highways (MoRTH)has been instrumental in driving the demand for construction equipment as over40 per cent of CE demand originates from this segment.”

It is estimated that road and highwayconstruction was about 30 km/day during FY23, which created demand for machineslike excavators, motor graders, crushers, and screeners, etc.

Krishnan further urged the Government to ensurea steady and high pace of highway construction be maintained throughout thecoming years to create a sustained demand for construction equipment. Healso added that a focus on debottlenecking the issues to accelerate the pace ofexecution of the existing infrastructure projects would enable the industryplan better to cater to the emerging demand for the equipment.

Besides road and highway sector, a steepincrease in railway construction in FY23, clocking 14km/day of track layingowing to commissioning of new lines, doubling and gauge conversion, etc,enhanced focus of the state governments towards traditional infrastructuredevelopment – roads, irrigation as well as rural/urban development – and thesteady revival of the real estate industry were the other factors thatcontributed toward the growth of the industry and resulted in higher demand forconstruction equipment during the year. Additionally, a 15 per cent increase incoal production in FY23 led to higher sales of mining equipment likehigh-capacity excavators, motor graders, and dozers.

“FY2022-23 was a year that saw volumes peak tothe best-ever performance, with the industry sales volume exceeding thepre-pandemic level by 10 per cent,” commented V G Sakthikumar, Convener, ICEMAIndustry Analysis and Insights Panel, and Managing Director, Schwing StetterIndia Pvt. Ltd. “Infrastructure projects including high-speed trains,metro-rail, and national highway construction contributed to the growth of CEindustry in Q1 and Q2 and the growth in subsequent quarters was backed onpetrol and refinery, steel plant, and port development projects.”

Sakthikumar mentioned that, with theGovernment’s continued focus on infrastructure development and a significantincrease in the capital expenditure outlay announced in the Union Budget2023-24, demand for construction equipment is expected to remain robust in thenear term with growth expected to be around 15-20 per cent in FY24.

“The growth comes on the back of the enhancedpace of construction and mining activity during the year, which resulted in asignificant increase in demand for all types of construction equipment.”

 Dimitrov Krishnan, President,ICEMA and Managing Director Volvo CE India Pvt Ltd.

“Infrastructure projects including high-speedtrains, metro-rail, and national highway construction contributed to the growthof CE industry in Q1 and Q2 and the growth in subsequent quarters was backed onpetrol and refinery, steel plant, and port development projects.”

-         V G Sakthikumar, Convener, ICEMAIndustry Analysis and Insights Panel, and Managing Director, Schwing StetterIndia Pvt. Ltd.