Construction and Mining

SIC 5082

Companies in this industry

Industry report:

This industry comprises establishments involved primarily in the wholesale distribution of construction, mining, and logging machinery and equipment. Industry products include cranes, dredges, and draglines (except ships), excavating machinery, front-end loaders, quarrying machinery and equipment, road construction and maintenance machinery, scaffolding, power shovels, and drilling equipment. Establishments engaged in marketing machinery and equipment for oil wells are included in SIC 5084: Industrial Machinery and Equipment.

According to the U.S. Census Bureau, miscellaneous new construction equipment accounted for the most revenues among the product segments in this industry. Used construction equipment was the second-largest product category, and new off-highway wheel and track-laying tractors represented the third-largest category.

An estimated 5,231 establishments employed 92,737 workers in 2009, with industry sales valued at $74 billion. The U.S. states with the highest sales volume included Texas, Illinois, California, and Florida, which together accounted for nearly 30 percent of the industry's output that year.

Demand for construction equipment fluctuated in accordance with spending in the construction industry. The industry managed to weather the global recession of the early 1990s with little more than a slowdown in sales growth. Fairly dramatic growth characterized the industry during the mid- to late 1990s, despite a nationwide trend to business consolidation in most other sectors. Within the industry, sharp increases were reported in both the number of establishments and the size of their workforces.

At the beginning of the twenty-first century the industry faced increased competition from such nontraditional participants as equipment rental services and large-format warehouse retailing. Industry analysts advised distributors dealing with contractors to focus on niche products and full-service offerings in order to keep their customers from turning to do-it-yourself retail outlets. Moreover, information technologies like the Internet provided new marketing challenges to the industry by allowing potential customers to reach easily outside of their local area to obtain equipment. As a result, numerous participants in the industry, as well as their trade associations, established Internet sites to reach the newly expanded market.

Although the industry benefited from the housing boom of the middle of the first decade of the 2000s, its fortunes turned during the economic recession and resulting dive in the construction market at the end of the decade. Revenue in the construction equipment industry fell more than 11 percent in 2009 alone. However, IBISWorld predicted both mining and construction machinery wholesaling would again experience moderate growth between 2012 and 2016. According to IBISWorld, "Construction levels will pick up, boosting demand for construction equipment and machinery. " In addition, "High commodity prices and growing demand from emerging economies will encourage mining companies to ramp up their production, raising the need for more mining equipment."

The industry leader in the wholesaling of construction and mining machinery in the early 2010s was Caterpillar Inc. of Peoria, Illinois. The firm operated 3,500 offices in 180 countries and employed almost 105,000 people. Sales totaled $42.5 billion in 2011. Deere & Company of Moline, Illinois, was another industry leader, with 2011 sales of more than $32 billion and 61,300 employees. Deere was best known for its agricultural equipment but also made construction and forestry machinery. Terex Corp. of Westport, Connecticut, was also a major player. Although it sold its mining equipment division to Bucyrus International in 2010, Terex continued to produce a variety of heavy construction equipment. With 16,300 employees, Terex reported sales of $4.4 billion in 2011.

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