The agriculture and construction equipment markets are happy to put 2024 behind them.
Despite some uncertainty over tariffs and a few other external factors, 2025 is poised to be a solid stepping stone toward even more prosperous years ahead.
That was the general message heard during the first AEM Business Intelligence Equipment Market Update webinar of 2025, held earlier this month. Tom Hopgood, a GlobalData economist, and Al Melhim, AEM’s senior director of business intelligence, shared insights into how the construction and agriculture industries have been faring.
Below are some highlights from the webinar…
Agriculture
As of December, low-horsepower tractor shipments in the U.S. were running 13% lower than the prior year. Canada was running 18% lower. Both countries were running 24% below the five-year average. Melhim chalks this up to the boom/bust cycle of the post-Covid 19 era, since most buyers of this type of equipment are non-professional farmers.
High-horsepower tractors and combines also struggled in 2024. Shipments were down 17% year-over-year in the U.S., although shipment volume was on pace with the five-year average. The situation was a little better in Canada. As of September, shipments were only down 10% year-over-year, and were actually 5% ahead of the five-year average.
“Softening commodity prices, low government support, high interest rates, and high input costs have translated to negative profitability of farming,” said Melhim. “This has had a profound impact on the purchase of capital-intensive equipment.”
Shipments of balers and foragers appear to have leveled off after some deceleration in 2023. “Unlike crop margins, livestock margins have improved over the last year,” Melhim said. “What’s been happening downstream in livestock operations seems to have improved demand for upstream inputs like equipment purchases.”
Moving forward, one thing to keep an eye on is inventory levels. Melhim said Days Sales of Inventory (DSI), a metric used to measure how long it will take to sell-down inventory based on recent sales average pace, is at a record high. DSI had come down a bit in 2022 when both low- and high-horsepower tractors hovered at around three months. Last year, DSI swelled to nearly eight months for low-horsepower tractors and four months for high-horsepower tractors. In Canada, it’s more like nine and five months, respectively.
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