Deere Reports Growth in Construction Equipment Sales
Uptick in equipment sales is another indicator the market is ripe for growth.
You probably associate the John Deere brand more with tractors and farm equipment than with construction equipment. But in reality machines like backhoes, excavators, and other construction equipment make up a significant segment of the company’s business.
In fact, Deere has reported that strong sales in the construction equipment sector are helping to offset losses suffered by their farming division.
Agricultural equipment sales have slowed around the world, with Deere’s second quarter sales for 2015 dropping by 25 percent over last year’s for a total of $5.77 billion. The total sales for 2015 are expected to be 24 percent lower than last year’s.
However, the company reported a small but significant uptick in construction equipment sales, with revenue increasing 2 percent to $1.63 billion in the second quarter of 2015. This 2 percent increase is expected to hold steady for the year, allowing Deere to beat analysts’ expectations for net income, revenue and profit.
What’s Fueling Growth in Construction Equipment Sales?
Deere’s agricultural equipment sales are further hampered by the fact that the US dollar has been growing stronger, making it more difficult for some of their overseas clients to afford new equipment. The construction equipment sales, on the other hand, are not plagued by this difficulty because most of these transactions are occurring domestically. Specifically, experts point to a surge in the American home construction industry as the reason for the increased demand for Deere’s construction equipment. According to the Commerce Department, new home construction starts are now occurring at their fastest pace since the Great Recession of 2008.
What Deere’s Success Means for You
Deere’s success in growing their construction equipment sales is yet another indicator that the US construction market is on a comeback. If you’ve been watching the signs, you are no doubt also watching for opportunities to get into the market as a builder or contractor.
Our Construction Management Information System can help you seize these opportunities as they come along and maximize your profits on the projects you win. Our CMIS was designed by construction professionals for construction professionals, and it includes all the functionalities needed to manage and administer a project from start to finish. You can:
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- Process all kinds of payroll
- Enjoy the most detailed work-in-progress reporting in the industry
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