AEM’s latest North America ag equipment industry trends report indicates member companies are adjusting to current market conditions.
Benjamin Duyck, AEM market intelligence director, said the Q2 2015 survey shows that while inventories (in units) have been decreasing quarter-over-quarter for manufacturers as well as dealers, they are still rated as too high. Decreasing inventories does indicate that the industry is becoming leaner and adapting to the reduction in demand.
The net rising index for inventories, measuring whether they are too high or too low, at the company level came in at 23, indicating more respondents felt the inventories were too high vs. too low.
While less people are indicating inventories at the dealer level are too high, there continues to be some concern that they are too high for the current demand conditions, as that index came in at 6.4, up from 3.9 in the first quarter.
“Whether this trend will continue remains to be seen, but for now this is showing that the shedding of inventories seems to be slowing, indicating that our members have adjusted to the 2015 market,” Duyck said.
Market Demand Still Sluggish
The Q2 2015 member survey also indicated that the net rising index for demand year-over-year continued to be negative and lower than the previous quarter. The index came in at -45 percent, down from -38.4 percent last quarter and -17.6 percent last year.
“This is the 6th consecutive quarter that we have had a negative index,” Duyck said. “An index below zero means that more respondents believe the market is shrinking versus growing. Last quarter, we did see an uptick in the net rising index for planning (next 12 months), but that optimism seems to have fizzled.”
While still positive, few respondents are indicating the market is growing. The net rising index for planning came in a 4.4 percent, down from 15.4 percent last quarter, but up from -15.8 percent last year.
Respondents asked about the market offered the following comments: “Doesn’t look strong,” “What started out slow, got slower,” “Ag continues to decline for the 4th consecutive quarter,” and “Demand is sluggish with flat to negative for the next 12 months.”
For More Information
These data and much more are available to AEM members participating in the Industry Conditions Survey. To participate, please contact AEM’s Benjamin Duyck (email@example.com, tel: 414-298-4154).