COVID-19 2020 North American Impact: Ag, -12%, Construction, -14%
HDMA-PSR COVID Webinar Presentation
COVID-19 continues to batter production of off-highway equipment as we continue to move through 2020. The effects of the virus on Agricultural and Construction equipment production in North America were analyzed in a June 17 webinar presented by the Heavy Duty Manufacturers Association (HDMA) and Power Systems Research (PSR). The webinar updated information presented in PSR’s webinar in April.
The PSR webinar team was Jim Downey, PSR vice president-global data products , and Yosyf Sherementa, PhD, PSR director-product management and customer experience.
PSR projects AG to be down 9.4% and CN to be down 11.3% when comparing global production for this year (2020) to last year (2019).
China and India which have the largest volumes for ag machinery are the lower side for production percentage drops this year. China which is also the largest producer of construction equipment is not expecting a decline this year.
A slight recovery for Construction equipment is expected in 2021, but not until 2022 for Agricultural machinery. Ag sector recovery will ultimately depend on overall economic recovery from the COVID-19 pandemic.
The construction segment will not return to pre-virus production volumes for another few years, at best. We’re looking out to 2024 or possibly 2025 to get back to 1.48 million units.
We don’t see a V-shaped type scenario on the horizon in North America, but rather recovery will look like something between a “U” and an “L.” Somewhat of a swoosh shape or upward sloping L. Economic activity will slowly return to a sense of normalcy as the curve of new COVID-19 cases flattens.
Government support and intervention will be needed, and stimulus will provide an economic backstop. We expect modest growth in 2021. Pent-up demand and continued economic stimulus should also help with rebound.
