Commentary: March-April 2013 – Slow and Steady Progress
Increases in equipment imports, sales and rentals provide clear signs of a growing Canadian market.
April 17, 2013 By Andrew Macklin
If the heavy machinery market is any indication, Canada’s aggregate and roadbuilding industries are growing.
If the heavy machinery market is any indication, Canada’s aggregate and roadbuilding industries are growing. They may not be growing as quickly as some contractors would like them to, but progress is being made.
This is a trend that has been reflected in the national, continental and global machinery import and export markets. Since the beginning of the year, several key financial statements have reflected the growth of the Canadian market:
- In February, the Association of Equipment Manufacturers in the United States released its annual report on the export of construction equipment. Once again, Canada remained the number 1 importer of American-made machinery, growing 12% over 2011 to $8.1 billion. That 12% increase was just shy of the overall 13% growth seen overall.
- In early March, Finnish equipment manufacturer Metso announced in its annual report that sales of its equipment to Canada had also grown, with an increase in net sales of $19 million Euro to $291 million in total.
- In late March, Strongco announced an 11% increase in sales over 2011 for a total of $305 million. In addition, its rental business saw a growth of 9% to $32.3 million, and experienced product support revenue growth in all regions across Canada.
There was positivity from the used equipment market as well. Ritchie Bros. posted a record year, topping the $1-billion sales mark in 2012. While it’s tough to know what percentage of the equipment sold at auction was from foreclosures versus equipment upgrades, it is a positive sign that so much equipment is being purchased by the industry, especially right here in Canada.
Those same companies gave positive reinforcement to the financial data provided by those reports at this year’s World of Asphalt/AGG1. Our conversations with representatives from Volvo, Case and Terex Finlay, all sold by Strongco in Canada, focused on the growth of the Canadian market and the increase in machinery being shipped to customers north of the border. In talking with Aggregates & Roadbuilding, Metso officials echoed this positivity, discussing the excitement of new opportunities in this country.
There is also a push on to expand distributor networks in Canada. At least five equipment manufacturers said they would have announcements coming soon regarding expanded Canadian distribution. We have already seen some of this happening, including Bison Iron becoming a Powerscreen dealer in Alberta and Strongco expanding its presence in Quebec.
The release of the new Building Canada plan also provides optimism for the growth of Canada’s aggregates and roadbuilding industries. The new plan, combined with additional federal infrastructure investments, will provide $70 billion in federal funding over the next 10 years. That represents the largest federal infrastructure investment in Canadian history. The investment made by the federal government, and the subsequent investments made by municipal and provincial governments, should keep the demand for aggregates high, and create an abundance of roadbuilding projects to keep contractors, and their employees, busy.
We can only hope that the slow and steady growth of these first three months continues throughout 2013. The sentiment throughout much of the industry is that it will, with aggregate suppliers and roadbuilders already looking ahead to the construction season in much of Canada. Let’s hope that really is how the upcoming construction season plays out.
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