CONMESA Press Release – 11 July 2018

Construction and mining equipment sales rise

Sales of construction and mining equipment continued to improve during the first quarter of 2018, with sales of new equipment reaching levels last seen in the first quarter of 2015.

According to figures released by the Construction and Mining Equipment Suppliers’ Association (CONMESA), a total of 1542 units were sold during the period, an improvement of nearly 100 machines during the same period last year. It also extends the upwards trend that has seen equipment sales inch upwards since the beginning of last year.

CONMESA Chairman, Lawrence Peters, says the move is in line with the associations expectations and predictions at the beginning of the year. He adds that the second quarter should continue a similarly positive trend, but with the uncertainty of volatile exchange rates and rising fuel costs possibly weighing against a sharper increase in sales.

Low demand

“The recovery has been steady, but slow due to the underlying challenges faced on both the mining and construction sides of the industry. While low commodity prices have weighed heavily on the mining sector the sluggish sales are also because of political uncertainty, as well as unease of the mining charter and its impact on mining investment in South Africa.

“On the construction front, we are still not seeing any significant infrastructural projects in the form of headline project and this means that the large and medium construction companies are not buying new machines to the extent that they had previously. Their fleets are being employed elsewhere on smaller projects thereby hindering sales to second and third tier companies,” says Lawrence.

Along with other executive members of the association, who are elected from member companies within the association, Lawrence represents the large multiagency equipment distributor, ELB Equipment, which has exposure in nearly all sectors of the mining and construction industries. His company experience also bears out the findings, where sales are improving across-the-board, rather than pointing to any one sector.

Cautiously optimistic

This is reflected by fellow board member and representative from Bell Equipment, Dale Oldridge, who says the company’s figures are better than expected in all areas with mining equipment performing particularly well.

He says that internally the company is also optimistic that construction equipment sales will improve during the latter part of the year as infrastructure projects are launched close to next year’s elections.

Barloworld Equipment’s, Dr Samantha Swanepoel, concurs reporting that sales are improving across all industries, but reminds us that the industry’s improvement is off a relatively low base. She adds that factors such as the implementation of the Mining Charter, as well as negative mining news headlines are still depressing aftersales business and margins.

Stagnant market

One supplier who has been negatively affected by the lack of roads developments is Wirtgen South Africa. With a relatively small exposure to the market in compaction and roads, Wirtgen’s Calvin Fennell, says since 2013 to the end of 2017 the market has been decreasing in the number of units by on average 10% year-on-year. This is in The Roller/Paver/Planer/Mixer market category and the decline has been across the board.

“Until such time as large infrastructure works are awarded the reducing market with increasing numbers of competitors is going to be tough for us and the other established brands,” Calvin concludes.

CONMESA, Dr Jim Rankin, Tel: (011) 453 7249, Fax: (011) 453 9710, Email: jim.rankin@agfacts.co.za

CONMESA Press Release – 22 February 2018

Better year for yellow equipment

Earthmoving and mining equipment sales moved strongly upwards during 2017 to break a three-year downward cycle that had gripped the industry since the second quarter of 2014.

Figures released by the Construction and Mining Equipment Suppliers’ Association (CONMESA) show that 5614 new units were sold during the year marking a healthy 18.3% increase over the previous year’s results. Until then the decline in sales had seen the number of units sold dwindle from 7250 units in 2013 to a low of 4747 in 2016.

CONMESA Chairman, Lawrence Peters, says the increased sales stem from a wide number of factors including regional construction projects, a resurgent agricultural industry, as well as a relative recovery in certain commodities such as coal which resulted in some suppliers with exposure to those markets doing better than expected.

“A true recovery can only be expected when the market picks up and we see a sustainable improvement across all sectors of the local economy. Nonetheless, it is a positive sign and bodes positively for the year ahead,” Peters says.

He says that figures for the four quarters of 2017 averaged approximately 1400 units per quarter, which is a welcome improvement over the 1180 units per quarter averaged in the previous year.

CONMESA, Jim Rankin, Tel: (011) 453 7249, Fax: (011) 453 9710, Email: jim.rankin@agfacts.co.za