Top three concerns for equipment manufacturers heading into the new year

As the end of the year approaches, many construction equipment companies are busy planning their strategies for the coming year. However, identifying the best path to development is not an easy task. Uncertainty caused by internal and external challenges is becoming increasingly apparent.

In this article, we'll explore the three core issues manufacturers face in the new year and share how to solve them.

Address internal labor shortages

Today, the biggest challenge for manufacturers is no longer the supply chain, but how to find and retain the workforce. The manufacturing sector is particularly vulnerable to labor shortages, which further exacerbates inflationary pressures.second hand excavator

status quo

• In the U.S., the job-seeker-to-job ratio is about 1.5:1, resulting in a 4.5% increase in average wages over the past five months.
• The labor force participation rate has declined, especially during COVID-19, when many employees over the age of 55 left the workforce.
• The birth rate has been at an all-time low in recent years, suggesting that talent attraction will be a long-term problem.

solution

• While technology can alleviate labor shortages to some extent, successful companies need to have a comprehensive strategy in place, including plans to attract and retain employees.
• This requires innovative thinking and effective messaging strategies. For example, the implementation of innovative approaches such as a four-day workweek and 36-hour weekend shifts.

Respond to market volatility

Government investment, such as the Infrastructure and Jobs Act, continues to support the construction market outlook, but uncertainty remains in the market.

status quo

• Despite these investments, the overall real value of the U.S. construction industry remained weak, contracting by about 3%.
• The decline in residential construction is the main reason, while rising interest rates are also putting pressure on the financing of new mortgages.
• Contractors involved in infrastructure, energy and utilities, and industrial and manufacturing are expected to perform well in 2024 and beyond. However, the funding was not immediate, and it will take time for the project to start and design.

Impact on equipment sales

• As the market shifts to infrastructure and industrial projects, the demand for certain types of equipment is likely to change, favoring larger equipment.
• Contractors have experienced significant market volatility in recent years, including COVID-19, supply chain issues, and volatile fuel and material prices, among others, causing them to be more cautious and potentially postpone purchase decisions.

solution

• The equipment leasing market could become an attractive option, especially against the backdrop of rising interest rates and increased uncertainty.
• Leasing provides contractors with flexibility and cost-effectiveness, potentially accelerating the development of leasing trends.

Solve external labor problems

Construction contractors face labor shortages similar to those in all technology industries.

status quo

• Even if jobs exist, contractors may be reluctant to purchase additional equipment because they can't find the right operator to maintain productivity.
• The number of skilled workers and experienced operators is rapidly decreasing, and the supply of new talent is not enough to fill the gap.Used excavator

solution

• Equipment suppliers need to be able to demonstrate how their solutions can help contractors maintain or increase productivity in the face of staffing shortages.
• Technological innovations, such as simplified control, semi-autonomous operation, and remote control, are gaining traction in the construction equipment market to solve labor problems.

Summary and outlook

In the face of the challenges of 2024 and beyond, construction equipment manufacturers need to be agile and develop a comprehensive strategy to overcome current internal and external challenges. While the market is likely to cool further, this also presents an opportunity for manufacturers to remain competitive through innovation and adaptability. The North American market is likely to be more challenging than in Europe, where inflation is likely to be more severe. But overall, with effective strategic planning and execution, manufacturers can still succeed in this volatile market.