Key Takeaways
- Most companies report strong demand trends and a positive outlook for the rest of 2021. The U.S. infrastructure bill is expected to support growth over the next few years.
- Rising input costs, such as steel and copper, are increasing manufacturing expenses.
- Supply chain constraints persist, but major manufacturers like Caterpillar believe the situation is manageable.
- Equipment rental company demand is showing signs of recovery.
Global construction demand remains strong, driven by post-pandemic economic recovery. Many manufacturers see long-term tailwinds from government stimulus and infrastructure investment.
Despite supply chain issues, most companies report that inventory levels remain stable. Caterpillar noted that dealer inventories are currently at the lower end of historical averages.
Several manufacturers highlighted challenges with rising costs and supply chain delays, but all remain optimistic about future growth.
Company Outlooks
| Company | Outlook | Date |
| Titan Machinery | Positive | 8/26/2021 |
| John Deere | Positive | 8/20/2021 |
| Linamar | Positive | 8/11/2021 |
| Manitowoc | Positive | 8/5/2021 |
| Manitex | Positive | 8/3/2021 |
| Caterpillar | Positive | 7/30/2021 |
| CNHI | Positive | 7/30/2021 |
| Hitachi | Positive | 7/30/2021 |
| Komatsu | Positive | 7/30/2021 |
| Terex | Positive | 7/29/2021 |
| Oshkosh | Positive | 7/29/2021 |
| Volvo Construction | Positive | 7/20/2021 |
| Atlas Copco | Positive | 7/16/2021 |
Titan Machinery
"Equipment demand momentum continued through our second fiscal quarter, with equipment revenues up 35% year-over-year. Our healthy inventory position and robust demand, along with continued strength in parts and service, are driving this performance," said David Meyer, Chairman and CEO of Titan Machinery.
"We're especially pleased with the improved performance of both our Construction and International segments."
"The current environment is allowing us to showcase the improvements we've made to our business over the past several years. Our inventory turns are trending upward, and we're receiving shipments that help us meet our revenue targets. While supply chains remain tight, we're confident in our ability to drive growth through the second half of the fiscal year and have adjusted our models accordingly."
"We're seeing increased construction activity across most of our markets, driven by economic reopening, low interest rates, new housing starts, farmer and rancher purchases, and improved oil prices. We're also excited about our operating improvements, which are translating into significantly enhanced pretax profitability," added Bryan Knutson, COO of Titan Machinery.
View Titan Machinery dealersJohn Deere
"Our strong results, driven by essentially all product categories, reflect the exceptional efforts of our employees and dealers to keep factories running and customers served despite significant supply-chain pressures," said John C. May, Chairman and CEO.
"Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals."
"North American construction equipment sales are forecast to rise between 15% and 20%, with compact construction equipment up 20% to 25%. Forestry equipment, driven by strong lumber demand, is expected to increase by 15%."
"End markets for earthmoving and compact equipment have benefited from a strong housing market. While growth has slowed slightly, we're beginning to see positive indicators for non-residential investment and order activity from independent rental companies heading into the fourth quarter."
"Demand for earthmoving and compact construction equipment will exceed our production for the year, resulting in low inventory levels as we exit the fiscal year. We expect sales in the CNS segment to be up around 30%."
View John Deere dealersLinamar (Skyjack)
"Market demand is strong, helping to drive an excellent recovery for us at Linamar," said Linda Hasenfratz, CEO of Linamar. "While supply chain shortages are creating challenges, we're managing them effectively while growing market share and generating cash. We're confident in a sustained period of strong market demand once these issues are resolved."
"Skyjack saw a very strong quarter due to a deeply rebounding market. Commercial and industrial sales were up 48% in the quarter, mainly due to Skyjack's strong performance."
"Further growth is expected in core North America and European markets for the full year. Equipment utilization levels remain positive, with Q2 utilization between 93% and 98% of 2019 levels—well above 2020. Double-digit growth is expected in 2021 and 2022, as you can see."
"The strong backlog at Skyjack certainly supports this, and should drive double-digit sales growth for Skyjack this year and next."
View Skyjack dealersManitowoc
"Demand for our products continued to exceed our expectations as we capitalized on a steadily improving market," said Aaron H. Ravenscroft, President and CEO of The Manitowoc Company, Inc.
"As previously mentioned, the second half of 2021 will present challenges on various fronts that our teams are proactively managing. Rising inflation, supply chain shortages, and skilled labor constraints are headwinds that will be more impactful throughout the remainder of the year."
"Market strength experienced in recent quarters has continued. We saw strength in all markets and regions, although the European market dynamics remain intriguing. Our tower crane business in Europe is as strong as it's been in the last five or six years. However, the mobile crane market in Europe is still lagging. In Asia, we continue to see strong demand, though China has slowed during the summer months."
"In the Americas, the business continues to post improving results, and any infrastructure bill the government may pass will provide good tailwinds for the coming years."
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Manitex
"We reported higher revenues, improving gross margins, and improved EBITDA in both dollars and percentage. Our adjusted net income from continuing operations was over $2 million for the quarter, and we're on pace to reach higher annualized levels than we've seen in recent years. We continue to gain share on knuckle booms and aerials in certain European markets such as Italy, France, Spain, and the UK, and our straight mast boom truck business is tracking to an industry-wide recovery from 2020, where we remain a market leader," said Steve Filipov, CEO of Manitex.
"We're seeing more confidence from our distributors and partners in their order patterns. There are tenders we continue to work on globally, and legislative progress towards an infrastructure spending program in the United States suggests increased construction activity. Our products are well-suited to handle much of the work that will be done through new funding initiatives, and we're excited about the opportunities ahead."
"Our backlog, at over $111 million, reflects a healthy recovery in demand in many of the markets we serve. While the supply chain continues to pose challenges to the industry for product availability and pricing, we expect a strong finish to the year," concluded Mr. Filipov.
View Manitex dealersCaterpillar
"We’re encouraged by higher sales and revenues across all regions and in our three primary segments, which reflect continued improvement in our end markets," said Caterpillar Chairman and CEO Jim Umpleby.
"We had gains in all three of our primary segments. Machines rose 20% with similar increases in both construction and resource industries, with improvement in all regions. Demand from residential construction remained strong, and demand related to non-residential improved."
"Mining was also up. Quotation activity for miners remains strong, and we've seen a significant improvement in orders through the first two quarters. We were also pleased that Heavy Construction and Quarry and Aggregates strengthened, as did several end markets within Energy and Transportation."
"Energy and Transportation sales to users turned positive, rising 1%. Keep in mind that the slowdown in end-user demand in 2020 affected the Energy and Transportation segment later than others, as some applications are impacted by timing of large products."
"From a geographic perspective, we had strength in sales across all regions. North America was quite strong, as expected. The EMEA and Latin America also showed double-digit sales growth."
"Dealer inventory declined $400 million during the second quarter. Similar to the first quarter of this year, dealer inventory remains near the low end of the normal range."
"Despite the unprecedented challenges impacting the industrial sector, I'm proud of the work by our team to minimize disruptions, which were relatively modest during the second quarter. For the majority of our products, availability remains within our normal ranges. We mentioned on the last earnings call that the supply chain situation, including transportation, was challenging, and that our team was preparing contingency plans such as alternative assembly processes at our facilities."
View Caterpillar dealersCNH Industrial (Case)
"Despite ongoing supply chain challenges and inflationary pressures, the continued strength of our end markets, along with aggressive pricing activity, margin expansion initiatives, and solid teamwork, propelled us to record second-quarter earnings. Our industry is clearly in a cyclical upturn, and the sound fundamental performance of our businesses and operations is enabling us to capture much of the benefit. This robust environment contributed to growth across AG, CE, and C&SV order books, which also reflected the excellent Q2 performance of each of these businesses," noted Scott Wine, CEO of CNH Industrial.
"For Construction Equipment, we see persistent growth in both the light and heavy segments. The light segment is largely driven by continued strength in residential construction, while the heavy segment is due to increased contractor demand as well as preparations for the probable U.S. infrastructure bill. Construction Equipment demand in South America is particularly high, driven by overall segment demand in Brazil. Compared to the same quarter in 2019, the construction industry grew double-digits worldwide, except for heavy in North America and Europe."
View Case dealersHitachi
"Solid order intakes mainly in markets recovering from the COVID-19 pandemic."
View Hitachi dealersKomatsu
"Construction, Mining & Utility Equipment demand should remain steady in residential and non-residential construction as well as road and traffic infrastructure. Demand for rental equipment is starting to recover."
"European construction demand is recovering, centered on major markets such as the United Kingdom, Germany, and France."
"Global mining demand is very strong, up 46% year-over-year driven by Oceania, Latin America CIS and Asia."
View Komatus dealersTerex
Our AWP and MP segments continue to perform well, allowing us to capture the benefits from the positive market fundamentals we're seeing. First, in Genie. The current market dynamics point to a multi-year replacement cycle for access equipment. The average age of fleets globally is increasing, and customers need to replenish their fleets, so the replacement cycle is kicking in. We're beginning to see positive indicators for non-residential investment, as well as continued strong order activity.
(Utility business) demand is strong across its end markets of tree care, rental, and investor-owned utilities. In addition, we are experiencing strong growth in our utilities parts and service business.
Next for materials processing, we expect global demand for crushing and screening equipment to continue to grow. Broad-based economic growth, construction activity, and aggregate consumption are the primary market drivers. We are seeing strong markets for the cement mixture, material handling, and environmental businesses.
In addition, global monetary and fiscal stimulus programs have supported stronger demand in our end markets. Overall, we are seeing robust market conditions around the world for our industry-leading products and solutions.
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Oshkosh (JLG)
"It’s no secret that global supply chain disruption and access to labor are presenting a challenge to industries around the globe, and our people have executed effectively to deliver strong results," said John C. Pfeifer, President and CEO of Oshkosh Corporation.
"As we look at the current landscape, many industries—including our own—are seeing a rapid increase in demand with market recoveries causing significant stress on global supply chains. And that has only intensified over the past quarter. At Oshkosh, we are witnessing the effect of these supply chain disruptions primarily within the Access Equipment business, impacting sales by approximately $100 million during the quarter. Importantly, we believe these supply chain issues will eventually subside, and we are well positioned to capitalize on the market recovery."
"Access Equipment: The recovery momentum we discussed on our last call continued in demand for our industry-leading Access Equipment. While we expected some supply chain disruptions in the back half of the year, the magnitude of the impacts has been more significant than we previously expected."
"Our access team did an outstanding job minimizing the volume impact during the quarter, which allowed us to deliver nearly 90% revenue growth versus the prior year. We are seeing strong demand led by North America. Elevated fleet ages combined with strong equipment utilization and a healthy rental market are fueling this demand."
"We expect a multi-year opportunity for robust replacement demand as rental companies look to lower the overall age of their fleets, which were at historically high levels entering 2021. We expect further opportunities when non-residential construction rebounds. As a result of these market fundamentals, our customers are already beginning to plan for their 2022 capital requirements."
"Orders were strong during the quarter, leading to a backlog of $1.75 billion, up more than 200% versus last year and an all-time record for access for the third quarter. We continue to be pleased with customer interest in orders for our electric booms and scissor lifts. The move towards electric is still in its early stages and is gaining traction with customers looking for improved performance benefits, total cost of ownership benefits, and carbon footprint reduction."
The bottom line for the segment is that we're still in the beginning of what we believe is a multi-year growth cycle as economies recover and customers use our safety and productivity-enhancing equipment in more applications.
View JLG dealersVolvo Construction Equipment
"During Q2 2021, demand for the Volvo Group’s products and services continued to be good. In a quarter when shortages of semiconductors as well as other production materials resulted in substantial production stoppages affecting both volumes and costs negatively, we achieved an adjusted operating margin of 10.7%," says Martin Lundstedt, President and CEO.
"In areas outside China, we have to mitigate (material cost inflation), introducing price increases to compensate for the raw material."
View Volvo Construction dealersAtlas Copco
Atlas Copco expects that the customers’ business activity level will remain at the high current level. Order intake increased 45% to a record level, representing organic growth of 54%.
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