Construction and Mining Equipment 2021: Bulldozing Over Covid 19 Setbacks
By: Resource Erectors
Tags: Mining, Recruiting, Equipment Rental, Mobile Equipment, Construction

In the third AEM [Association of Equipment Manufacturers] member survey conducted since the pandemic started, 75 percent of CEO respondents predict industry-wide revenue growth through October 2021.- Construction Equipment Guide

It’s hard to keep a strong industry down and civil construction and mining are two sectors showing impressive resilience in the wake of 2020’s global Covid 19 shutdowns and disruptions. While overreaching, politically driven restrictions and regulations have no doubt left their scars, intrepid industry leaders are determined to bulldoze right over the roadblocks set in their way on the road to a robust rebound in 2021. And once again, innovative equipment management approaches using digital services and platforms are the key, forecasted to drive up to $273 billion growth by 2030 according to this informative report at Benzinga.

The 2021 Construction and Mining Equipment Sales and Rentals Market

Growth in infrastructure development

Increases in delayed urbanization projects

Alternate powertrains for heavy equipment (electric drives with digital technologies)

Demand for modern, compact, rental equipment

Telematics and digitization are building a strong reputation for boosting operational efficiency that results in robust ROI, according to industry analysts Frost and Sullivan. While 2020 saw numerous pandemic delays, the rebound in the 2020 construction and mining equipment sector will be fueled by a variety of factors to resolve the pent up demand driving the top industry trends of the heavy equipment industry including:

According to the Benzinga analysis, telematics companies in lucrative partnerships with autonomous retrofit providers and equipment rental companies can offer streamlined fleet modernization for key markets including the United States, China, Europe, and India. Rental fleets make it much easier for construction and mining companies to manage operational costs while increasing utilization capacity.

These reciprocal partnerships can boost the 2021 rebound and grade right over the Covid 19 pandemic scars from the depressed 2020 heavy equipment market. End-of-year estimates are anticipating a reported “18% decline in the unit sales of heavy equipment in 2020 due to the decline in manufacturing, operations, and distribution centers across the globe”.

But rapid growth in rental programs incorporating IoT (Internet go Things) can allow OEMs to accelerate the development of compact, autonomous construction and mining equipment that bring operational costs for companies way down. In mining operations, 30% of the workforce is often dedicated to equipment maintenance alone, generating 40% of operational expenditure.

Outsourcing to reduce maintenance opex for construction and mining corporations will place OEM dealers in a dominant position for equipment service and maintenance, while providing a streamlined path to the latest state-of-the art equipment fleets for optimized ROI.

“Growth will be driven by the Asia-Pacific market and the earthmoving segment in the short term. The transition toward rental models, electrification, and automation will happen in the medium to long terms.”- Krishna Achuthan, Commercial Mobility Industry Analyst at Frost & Sullivan

The Construction and Mining Equipment Rebound: Slow But Steady

While small equipment (under 10 tons) may continue to struggle in the first half of 2021 due to a decrease in housing and non-residential building construction, consumer confidence could rise by the second half of the new year and help to erase significant declines in small rental equipment. The need for more compact equipment in urbanization upgrades will also have a positive impact on the small equipment sector.

Infrastructure construction is expected to make up for lost ground experienced in 2020. Mid to large size equipment utilization demand can benefit from these large long term projects funded by governments and economic stimulus and environmental programs. Electric utilities/gas plants will pick up by 35 percent in 2021, led by expected groundbreakings for several large LNG export facilities and an increasing number of wind farms.

After a 4% decline in 2020, compared to 2019, management consulting firm DuckerFrontier predicts that in the process of catching up with the backlogs caused by covid-19 shutdowns, “both contractors and their machinery will be extremely busy next year”. That could cause a scramble for rental equipment as the springboard to a slow but sustained rebound in the industrial equipment sector.

The latest forecast released by the American Rental Association (ARA) on Nov. 12 anticipates 6.8 percent equipment rental industry growth in 2023 and 4.8 percent in 2024 to reach $59.7 billion, according to the report After a Tough Year, Heavy Machinery Sales Will Pick Up in 2021 … Beyond at Construction Equipment Guide.

Dodge Data & Analytics predicts that total U.S. construction starts will increase 4 percent in 2021, to $771 billion. This is a good start to recovery from 2019 where pandemic impact and the shutdown recession has been a lingering obstacle to construction starts in 2020.

In the mining sector, rising demand for dump trucks, and hybrid trucks in particular, is expected to “drive the largest slice of the construction equipment sales pie”, according to research conducted by Markets and Markets Inc. The study data implies that a “major chunk” of the global electric dump truck market includes hybrid mining dump trucks with higher capacity, power output, fuel efficiency, and reduced maintenance cost. The overall global construction equipment market size is expected to reach nearly $170 billion this year, and have a value of $205 billion by 2025.

So while the rebound in construction mining and equipment sales and rentals won’t be instantaneous in 2021, progress in the sector will be, like the equipment itself, powerful, slow, reliable, and steady.

Catch Up on Your Backlog in 2021 With Resource Erectors

While 2020 has been a year of trials and tribulations for us all 2021 is shaping up to be a year for rolling up our sleeves and getting back to business as usual. If you’re an experienced professional ready to take advantage of new opportunities in 2021 we’ve got enduring working relationships with the industry-leaders who are seeking your talents.

For organizations getting ready to roll to success in 2021, we can help you build your dream team while eliminating further disruptions by avoiding the high costs of a bad hire and filling those essential vacancies that pile up operational expenses day by day. We maintain vital connections with the top professional candidates and industry-leading companies in civil construction, mining, minerals, aggregates, concrete, construction materials, engineering, and more.

When it’s time to get your workforce in shape to catch up with your 2021 backlog, Resource Erectors brings decades of specialized industrial human resource experience to the table. Over 80% of our highest qualified professional candidates placed are still contributing to the profitable success of their companies 5 years later, so please don’t hesitate to contact us today to be prepared for the rebound just around the corner in 2021.