Heavy machinery imports plummet

JUST launched on Friday, the Skelton Sherborne Shipping Index for June has revealed startling falls across the board in heavy machinery imports, squashing talk of a “green shoots” recovery.
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Greg Rowan, senior inspector of mines, Queensland Government Natural
Resources & Mines

Blair Price

Using data from the Australian Bureau of Statistics and Australia’s dominant heavy equipment importer, Skelton Sherborne, the index covers the amount of new and used heavy machinery imports from July 2008 to June 2009.

 

The crunch delivered by the global financial crisis in September is clearly shown, with a peak of 6105 heavy machines imported in August dropping off 90% to a mere 623 imports in June, which was actually up 21 machines from May.

 

In terms of investment dollars, the August peak imports were worth a total of $A368 million, while June’s imports were worth $105 million, a fall of 71%.

 

Looking at imports of specific equipment types over the August to June period, tracked cranes dived 97% to two units, mining and construction dump trucks sank 91% to 12 units and excavators/draglines weighing more than 12 tonnes fell 91% to 12 units.

 

The best performer, bulldozers, still had a fall of 29% from the August peak to 44 units in June 2009.

 

Despite the infrastructure development talk from federal and state governments, imports of roadmaking/paving and public works equipment fell 91% from the August peak to June 2009, and graders – a key road-building machine – dropped 89%.

 

Skelton Sherborne director Brad Skelton told ILN he found it curious roadmaking and paving heavy equipment imports had fallen so strongly.

 

“That is the sector the federal government has been pouring money into – building more roads and infrastructure.

 

“I am not an economist but my layman’s logic would be that that should increase.

 

“If the stimulus is working, you would think that would be increasing. But it’s down close enough to 100 per cent.”

 

Despite the small pick-up of 21 machinery imports from May, Skelton said this certainly was not a large enough increase to declare the downturn has bottomed.

 

“I think a recovery will only come when banks and financial institutions are lending to the industry,” he said.

 

Skelton receives daily feedback and comments that ultimate contractors or end users at the small and medium-sized enterprise level are struggling to get finance.

 

Commenting on the drop in demand for imported heavy machinery, Skelton said his company was generally seeing a lot more equipment parked and idled, while dealers had been trying to sell down their inventories.

 

Turning to demand for second-hand equipment, Skelton said his perception was that the used market had pretty much fallen in line with new machinery.

 

The index itself has received positive feedback, with Skelton taking non-stop calls since Friday from people in the equipment business who are pleased to know what the actual import figures are.

 

“We’re in a unique position to comment on this because a vast majority of the market uses my company, we are one of the biggest in the market in Australia,” Skelton said.

 

He said there had also been an increase in the number of enquiries and quoting activity.

 

“My feeling is that we might start to see a small amount of growth in these numbers in the coming months.

 

“But I am not willing to declare that we have seen the bottom.”

 

For longwall equipment, Skelton said this probably fell into one of the “other” equipment categories and he planned to dig through the figures to update ILN.

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