The industry expects the recovery to be gradual amid easing of lockdown and opening up of the economy in many parts of the country.

The Indian construction industry is facing numerous headwinds as a result of the economic slowdown and other factors impacting construction activities. As a result, the construction equipment (CE) industry witnessed a significant volume de-growth of 16% in CY2019. Volumes de-grew by 22% in FY2020. The situation has been further exacerbated by the Covid-19 outbreak and the nationwide lockdown. The industry is expected to de-grow 20% during CY2020. Dealers and original equipment manufacturers (OEMs) are saddled with significant inventory, which will negatively impact the carrying costs of the industry in H1 FY2021.

Apart from the impact of the lockdown during March to May, Covid-19 has crippled several industries and eroded livelihoods. Weakness in government revenues streams, more so at the states; redirected government support to healthcare, possibly at the cost of all other capital spends; the need for structural changes incorporating social distancing in several industries like construction; movement of labour and material; and the cost of restarting the economy — all these thwart the ability to make forecasts for sectors intrinsically linked to the underlying economy.

According to industry reports the demand is expected to revive during Q3 FY2021, after Q2 FY2021, which is typically a lean period for the industry on account of monsoons. However, with the easing of norms, and the efforts of the government, construction equipment makers see some revival in demand. It expects the recovery to be gradual amid easing of lockdown and opening up of the economy in many parts of the country.

With the 'Unlock' in India and opening up of the business, we are hopeful of a brighter future for the construction equipment industry. The government has already announced a slew of measures to stabilise the impact on the economy and especially, the construction and manufacturing industry. It would also give further growth push to the allied industries like mining, steel, cement, etc. Hence, it has become all the more important now, to reboot and resume the activities in the road sector as quickly as possible.

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