Throughout the nationwide shutdowns due to the novel coronavirus (COVID-19) pandemic, DuckerFrontier has been speaking with heavy equipment dealers and end users to gain insights into the current state of the market and predict where the market is headed post-pandemic. The industry’s success before the crisis, and its resiliency and continued operation through the crisis will allow the heavy equipment industry to emerge from COVID-19 ready for a solid rebound, although the environment will look somewhat different.
Prior to the global shutdown
The demand for infrastructure improvement and heavy construction was high despite a wavering global economy. This was spurring a considerable amount of market innovation across four major areas, driving overall growth.
During the shutdown
While many segments of construction have been halted across the United States, infrastructure development has continued and has found a “golden opportunity” to operate with fewer cars on streets, bridges and highways. According to a survey conducted by the American Road and Transportation Builders Association, only 21% of construction companies have experienced a DOT project shut down related to COVID-19. This has allowed many within the industry to remain employed, and has spurred a continued need for parts, service and equipment.
Distributors continue to make service professionals available to repair and maintain equipment for those machines in operation. They also report that those that have been forced to shut down are using this time to do time consuming, but necessary, repairs on their equipment. This will allow for consistent performance from the equipment once the stay-at-home orders are lifted.
Opportunities for growth and segments to monitor
The heavy equipment sector has been the most active during the shut-down. Infrastructure spending has continued with companies taking advantage of the reduced traffic levels to make headway on road and bridge projects. It is believed that these large projects that were approved prior to the shut down will be purchasing equipment to finish these jobs. There is some concern that residential construction will take a significant hit due to declines in buyer ability to spend.
Keep an eye out for Part 2 of this series on what the future holds for the heavy equipment industry after the pandemic and into 2021.
DuckerFrontier’s Heavy equipment team is at the forefront of key trends impacting the industry amid COVID-19 disruptions. Visit our COVID-19 Resource Hub for the latest insights and implications for global business, or contact us to connect with a team member.