According to figures released this week, the global demand for agricultural machinery is set to rise by 6.7% in the years running up to 2016, fueled by the rapid economic growth in countries such as China, Brazil and India.
A substantial rise in the populations of these countries fueled by a burgeoning economy will mean that there will be increased pressure on them to be able to become more efficient and productive, which, in turn, will result in far higher sales of agricultural equipment. Firms such as John Deere are already reaping the benefits of these developments and have seen substantial rises in profits – a trend which looks as though it will continue to develop.
Although industrialised nations will see below average growth in the sales of agricultural equipment, the market will in no doubt be bolstered by sales from emerging economies, and will lead to an estimated $173.5 billion in sales.
However, it is not all bad news for Western nations. It has been noted that at the beginning of the economic downturn, many farmers delayed purchasing new equipment as they waited to see which way the market would go. Because of this, there has been a spike in demand for equipment over the last year or so. It is however predicted that this will lead to further decline over the coming years.
China too is also expected to take over from the USA as the largest supplier and manufacturer of agricultural equipment in the world, with around 70% more industry shipments. It is also estimated that production in other emerging markets such as Brazil, India and Argentina will rise dramatically.