Industrial equipment manufacturers have a lot of reasons to be optimistic as they look ahead to the next five years. But, at least in the short term, economist Eli Lustgarten of ESL Consulting says that it might just take a cataclysm for agricultural equipment manufacturers to be able to say the same.
Recent years have been exceptionally productive for farmers, on a global scale. And, ironically enough, that's impacting farmers' bottom lines and having a chilling effect on growth in the agricultural sector.
"Commodity prices remain depressed because we have such large excess carryovers in crops, not only in this country but around the world," Lustgarten told AEM's recent Thinking Forward event at CNH Industrial. "And unless there’s some kind of weather event, it’s going to take a couple of years to get out from under the burden of these big crops."
At AEM’s recent Thinking Forward events at Oak Ridge National Lab and CNH Industrial, Lustgarten shared with participants his projected drivers and disruptors of growth for the rest of 2017. In the construction equipment sector, he expects continued slow and steady growth to serve as a baseline, with the potential for much bigger numbers if the new U.S. presidential administration can deliver on some of its promised pro-growth policies.
“We’re still waiting for execution," from the Trump administration, Lustgarten said. "The problem is everybody had high hopes, but nothing has changed. We’re still in the same position that we’ve been in for an extended period of time.”
Watch for more of Lustgarten’s analysis:
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