Domestic rating agency, ICRA in its latest report has stated that the domestic mining and construction equipment (MCE) industry is likely to grow by 13-17 percent in the calendar year 2017, with the demand for MCE continues to grow largely due to the surge in infrastructure spending. It also pointed out that this comes after a healthy 35 percent growth in the demand for MCE during the previous calendar year after four consecutive years of weak demand.
However, ICRA has said that in CY17, the growth in the sector has been marginally curtailed despite strong growth during January-February 2017 as the markets were temporarily affected by emission related ambiguity and Goods and Services Tax (GST) during April and July 2017, respectively. It expects that the sector’s growth to lower in 2018 with it growing by 8-10 percent. For 2019, it also expects that the growth in the sector may slow down to around 4 percent on the back of Union elections and high base effects.
According to the report, infrastructure investments in roads, irrigation, railways and metro drove demand whereas coal and iron ore mining, power, oil and gas and real estate tampered demand. It also said that the improvement in average per day execution of National Highway Authority of India (NHAI) projects to 10.33 km in the fourth quarter of the financial year 2017 despite demonetization and investments by Indian Railways helped in the growth in demand for MCE.