Volume of mining and construction equipment sector may fall

Ratings agency ICRA expects subdued near term outlook for the mining and construction equipment industry with demand for equipment expected to remain sluggish.

The agency expects sluggish demand for equipment because of the slow pace of infrastructural investments, weak business confidence and continued regulatory issues surrounding mining activities.

Consequently, the rating agency expects the mining and construction equipment industry to witness around 12 to 15 percent decline in volumes in 2012-13.

In its latest report, the agency said the MCE industry will witness a volume fall of 12 to 15 percent to around 60,000 to 63,000 units in 2012-13.

Key reasons hurting construction equipment volumes are the deferment in private projects and slow pace of infrastructural investments, among others, the agency said. Curb on mining in several geographies has impacted demand for mining equipment, the report said.

The current fiscal witnessed deferment or shelving of large number of projects from government and private sector alike mainly owing to various reasons including payment delays by government agencies, impacting demand for construction equipment.