Led by strong push to road and infrastructure development by the Centre, the domestic mining and construction equipment industry (MCE) is on a path to gradual recovery after a period of sustained contraction for about four years.

Industry representatives and analysts pointed out that the MCE sector has started on a growth curve, and the growth appears sustainable after almost six months of uptick in few equipment categories.

“The industry was facing a slowdown for three-four years due to various reasons. But, since the latter part of 2015, we have seen a positive demand trend in the industry. We are on a recovery path now as the industry grew to nearly 40 per cent in the period between January and April 2016 as compared to the same time in 2015,” said Vipin Sondhi, Managing Director & CEO, JCB India Ltd.

“Significant initiatives from the government have strengthened and revived the infrastructure construction in the country. With old projects getting cleared and new announcements being made, the roads and highways sector is leading this resurgence and 2016 has had a positive start,” he added.

Caterpillar India’s Country Head and Managing Director Vivekanand Vanmeeganathan also pointed out that there has been an upward momentum in both mining and construction sectors in the last few quarters in India.

“Both the sectors have been showing about 20–30 per cent growth in the previous couple of quarters. Going forward, we are hopeful that this will gain further momentum. However, one needs to understand that since these sectors have been in a downturn for the last two-three years, the growth figures are off a low base. But the industry is optimistic about growth accelerating from here onwards,” he added.

While the first four months of this calendar year has seen a strong double digit growth, the MCE industry is learnt to have grown by 2-3 per cent at about 48,000 units during 2015.

“We estimate the industry to grow at a healthy clip over the next 24 months to hit volumes of 74,000 units in the calendar year 2018, “ said Subrata Ray, Group Vice-President, Icra.

The key demand driver for MCE currently are aggregate mining for road construction, road laying activity, preparatory work (relocation and levelling) for large projects which are closer to operational stage (land availability) and financial closure and irrigation work (well digging, canal cutting) in several drought-hit States,” he added.

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