HEAVY EQUIPMENT MANUFACTURING
substituted by innovations such as AHS. Therefore, albeit employment figures have been on a downward slope in in- dustries such as coal and gold ore mining, this trend is more so a result of temporary cost-cutting measures rather than innovative equipment replacing jobs.
The Future of Mining Through 2018, pricing conditions for mining equipment
will remain strongly contingent upon the general health of the mining sector. IBISWorld anticipates major upstream indus- tries, including coal and iron ore mining, to recover slowly in the next three years. Prices of mining equipment are pro- jected to continue trending upward as well, driven by product innovation and rebounding demand. Even so, mining firms will benefit in the long run from procuring new equipment to reduce costs and improve productivity. In the meantime, the impact of technological innovation on employment trends will remain negligible.
Agriculture: A Market Struggling to Rebound The performance of prominent crops can have signifi- cant implications for the price of and demand for agricul- tural equipment. In the three years to 2015, the revenue for corn, soybean, wheat and cotton farming, which are all key agricultural industries, has fallen significantly. The uni- versal decline in revenue performance has been primarily a result of increasing domestic production and an appreciat- ing US dollar.
During the past three years, IBISWorld estimates that
corn production has increased robustly at an estimated average annual rate of 7.7%, partially due to improved weather conditions. Consequently, the market has been flooded with extra yield, contributing to an estimated aver- age annual decline of 21.6% in the price of corn from 2012 to 2015. The soybean market tells a similar story. Accord- ing to the USDA, soybean harvest yields increased at an estimated average annual rate of 2.2% from 2012 to 2015, coinciding with a 13.1% average annual decline in price. To boost revenue in light of falling prices, farmers have main- tained or increased production, thereby pressuring prices to remain low.
Significant appreciation in the value of the US dollar has also driven global agricultural commodity prices downward because they are generally traded with US dollars. In the three years to 2015, the value of the US dollar relative to a basket of trade partner currencies has grown an estimated
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AdvancedManufacturing.org | October 2015 See us at SOUTH-TEC Booth #622
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