The Indian Construction Equipment industry has reported a 14% quarter-on-quarter (QoQ) decline in sales in the first quarter of the current financial year. It sold an aggregate of 23,037 units in Q1 FY23 as compared to 26,910 units sold in the previous quarter.
“While this decline comes on a higher year-end base, given that sales generally pick up in the last quarter of a financial year, the decline was also a result of the slowdown witnessed in the highway construction activity from Q4 of FY22”, Indian Construction Equipment Manufacturers Association (ICEMA) President, Dimitrov Krishnan said in a statement.
Though the Q-o-Q sales were down, a comparison with the same period of the previous financial year shows a 59 per cent increase in sales in Q1 FY23. The growth however has been registered on a lower base as India was going through the second wave of COVID-19, leading to muted sales during Q1 FY22, Krishnan, who is also the Managing Director of Volvo CE India, added.
The Q-o-Q decline in the first quarter of FY23 was led by a 36 per cent drop in the sales of road construction equipment followed by an 8 per cent decrease in material handling equipment. This is a reflection of the 57 per cent decline in highway construction observed during the same period, ICEMA said.
A steeper decline in the industry’s sales was arrested by a 13% per cent increase in sales of Earthmoving Equipment followed by an 11 per cent increase in concrete equipment, perhaps driven by the stepping up of metro rail construction projects. The industry also saw a steep jump in sales of material processing equipment, which increased from 165 units in Q4 22 to 724 units in Q1 FY23.
ICEMA President said that, overall customer confidence and sentiments to invest in new equipment, particularly the hiring community, continued to be low affecting construction equipment sales. Krishnan urged the Union Government to consider policy interventions to control the persisting high inflation in input materials such as cement, steel, fuel, sand, etc, which are adversely impacting construction activity in the country.