Early numbers look strong, but will import duties affect the forestry equipment industry moving forward? For a few years, the forestry equipment market has faced a period of stagnation. Luckily, many believe that in 2018, the U.S. hunger for forestry equipment will rebound in a big way. The U.S. is the largest market for this type of equipment, so it is fantastic news that industry reports from Freedonia Group predict that the United States will account for as much as 19% of all global product demand through 2021.
What's the reason for this growing demand, and what effects are the forestry equipment industry already experiencing?
Key Drivers
In the same report from the Freedonia Group, they cite that the rise of construction activity in the U.S., roundwood production, and the use of logging methods that require higher-end equipment as the cause for the growth in demand. If we turn our attention to other global players, Canada is one of the biggest losers, as they brace for a deceleration in market gains. This could be caused by the increased import duties on Canadian lumber, along with the impressive gains the country saw between 2011 and 2016.
Other Countries Predicting Gains
Along with the U.S. and countries in the Asia/Pacific region, countries in Latin America such as Brazil, for instance, are expected to record larger increases in equipment purchases at around 6.5% each year on through 2019. Smaller countries like Poland, Finland, New Zealand, and Indonesia will also see above-average gains over the next few years.
February 2018 Data
Industry-leading reporting firm EDA has already released the numbers for logging equipment buyers and lenders for February 2018. According to their database, the numbers are as follows:
Top 5 Lenders
Top 5 Buyers
Future Growth
While prices for lumber remain high and volatile, many industry experts predict that demand for forestry equipment, and the need for financing forestry equipment, will continue to rise all the way through 2019. In fact, the worldwide market demand will reach $9.3 billion in 2019 which is a 4.5% annual increase. The U.S. will continue to lead all other equipment buyers, but Asian/Pacific companies will also play a huge role in this demand drive.
Felling Equipment Rises
Analysts point out that felling equipment accounts for a significant portion of the world’s forestry equipment sales. Following this category, aftermarket parts and specialized attachments, along with extracting equipment are the most popular amongst companies financing logging equipment.
In a similar report, EDA also noted the types of equipment that was most popular amongst buyers:
EQUIPMENT TYPE BUYERS UNITS