As equipment manufacturers look ahead to the remainder of 2023 and beyond, the landscape continues to present challenges for the industry and the ag and construction customers it serves.
AEM members report demand for products across both industries has softened. However, particularly in construction, investments in infrastructure, energy and utilities, point to better days ahead. And, as outlined in AEM's recently held Q3 Equipment Outlook Webinar, a wealth of data suggests optimism — both in the short term and long term — is (and should be) prevalent.
Now, with Q3 in full swing, and the final few months of the year right around the corner, a pair of AEM sector leaders provided their own thoughts and perspectives on the outlooks for the construction and ag industries, respectively:
AEM's Senior Director of Construction Sara Feuling on the challenges and opportunities facing the construction industry in the near term:
As the construction industry embraces change, there will be no shortage of challenges on the horizon. However, along with those challenges come a multitude of opportunities.
Numerous equipment technologies will fundamentally transform the way the construction industry operates, which necessitates an entirely new approach, not only to the job site itself but also to people and workforce. A variety of alternative power solutions also will be considered and implemented as the industry looks to reduce its carbon footprint, each bringing along with it its own unique challenges.
The construction industry is nothing but resilient, though, and it will continue to face challenges head on and take advantage of opportunities in front of it.
Feuling on the willingness of the industry to invest in and adopt new technology:
It's long been said the industry is slow to adapt to, and adopt, technology. That's not entirely the case, however. The men and women who support the industry want to do their jobs efficiently and effectively, and they take pride in their work.
New and cutting-edge construction equipment technologies allow them to do their work faster, better and safer. And, as technology is adopted, its benefits to people, planet and productivity will be validated, driving wider industry adoption.
Finally, manufacturers continue to invest in technology, focusing on the needs of their customers. The construction industry will soon see proven benefits, along with an even greater return on their investment.
Feuling on the outlook for the industry in both the near term and long term:
The construction industry is — and should be — optimistic in both the near term and long term. The Infrastructure Investment and Jobs Act (IIJA) will continue to be a key driver for construction growth, with hundreds of billions of dollars allocated for infrastructure, energy and utilities. Meanwhile, the CHIPS and Science Act and the Inflation Reduction Act are driving spending in the industrial and manufacturing sector.
This growth and momentum have even more potential, especially as the industry embraces technology to improve productivity and performance.
AEM Director of Agriculture Austin Gellings on the multitude of factors impacting how producers are approaching their work right now:
Essentially, everything hinges on where a farmer is going to be able to improve their efficiency the most and in turn see the greatest return on investment (ROI). With input costs continuing to rise, the best ways for a farmer to respond and continue to reap the rewards of strong commodity prices is to operate on those margins and find wins where they can. Technology, and even more specifically, data, provides such tremendous value and benefits.
As farmers are looking for ways to minimize inputs (and, in turn, costs), while still increasing yields, technology provides the answer. It can be an herbicide, fertilizer application or the feed being given to a dairy cow. The data insights that technology provides allows farmers to make better, more informed decisions for their operation and lead to more effective execution. We're even seeing the emergence of technologies, such as targeted spray systems, that are able to make decisions in real time to reduce inputs in the field.
Gellings on the factors poised to play roles in how much producers will look to invest in new equipment and technology in the near term:
Ultimately, the biggest deciding factor in a farmer's willingness to adopt new technology is whether or not it will actually work for them (and, perhaps more importantly, when they will see a return on their investment). Farms are a business and, more times than not, a farmer is ultimately more than likely willing to try something new if there is a solid business case to be made. However, most farms operate on the margins and don't always have three to five years to wait and achieve an ROI.
Gellings on the outlook for the ag industry in both the near term and the long term:
In both the near and long term, farmers and the ag industry as a whole is in a really great spot. In the wake of the COVID-19 pandemic, people are starting to realize now more than ever how fragile our food supply can be at this point. As a result, society possesses a greater appreciation for the men and women along that supply chain who work to make sure everyone has nutritious food available to them. That's why there's reason for optimism in the near term. Looking farther out, there is even more cause for optimism because of the role that agriculture can play in our journey to being more sustainable.
Agriculture has a huge role to play in addressing a number of the sustainability goals that exist around the world today. The important part will be how the industry tells its story and lend its voice to those conversations.
This story also appears on Agricultural Equipment Guide.
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