Excavators or shovels are engineering machines designed for digging and earthmoving work, used extensively in the construction sector. This is the largest product segment in the industry. A construction boom for much of the last decade has seen this segment demonstrate steady growth.
A loader is an engineering vehicle used to load material (e.g. asphalt, demolition debris, dirt, gravel, raw minerals, rock and sand) into or onto another type of machinery (e.g. dump truck, conveyor belt and rail car). Loaders are used extensively in construction. Both sectors also employ a range of off-highway trucks to transport materials, including haul trucks, dump trucks and articulated trucks. This segment has been fairly steady during the last five years.
Lifting and material-handling equipment is another product segment in the industry. Products include cranes, vehicles fitted with lifting and handling equipment and other machinery used to handle materials.
Other earthmoving equipment includes heavy machinery such as bulldozers, scrapers, compactors, graders and rollers. These products are typically used in large construction projects such as road building and have grown strongly during the last five years.
Most tractors were manufactured in Australia up until the 1970s. Since then, ongoing drought conditions, global rationalisation and the shifting of manufacturing operations to low-cost countries has seen tractor production move offshore. As most tractors are imported, they make up a relatively high proportion of agricultural machinery distributed by industry players in Australia.
Other major industry segments include harvesting and haymaking machinery, tillage and seeding equipment, and lawnmowers.
Wholesalers of construction and farm machinery should enjoy solid growth conditions over the five years to 2017-18, as an upturn in construction activity and forecast stronger agricultural production stimulates moderate demand for industry products. High population growth, a continuing inflow of capital into the resources sector and strong underlying demand for housing will foster demand for construction and earth-moving equipment. At the same time, rising global demand for food and strong investment into Australia’s agricultural sector is forecast to stimulate agricultural production and demand for tractors, harvesters and agricultural implements. Over the five years through 2017-18, IBISWorld estimates revenue in the industry will increase at an average annualised 3.6% to reach $22.4 billion. Industry profitability is forecast to grow moderately due to rising prices and, early in the period, the strong dollar.
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