Trendlines: Compact revolution

Source: Off-Highway Research

Sales of compact equipment (broadly, machines weighing under 13,000 lb./6 tonnes) have enjoyed a remarkable surge over the last 15 years. This has transformed the structure of the North American market from one dominated by heavy equipment to a sector where two out of every three machines sold is compact.

Until the late 1990s, the only compact equipment type sold in any significant volume in North America was the skid-steer loader. This was a phenomenally popular product at the time, representing one out of every three construction machines sold in the region.

The high tide mark for skid steers came in the mid-2000s at the height of the subprime-fueled building boom. The whole equipment market collapsed following the bursting of that bubble and the global financial crisis which ensued, and the compact equipment market that emerged afterwards was fundamentally different.

New compact leader emerges

Mini excavators, which had started to enjoy some popularity in the 2000s, sold in unprecedented volumes from the mid-2010s onward. They started to replace backhoe loaders on small scale excavating work, thanks to their more manageable physical size, lower cost and ability to slew through a full 360 degrees.

Compact track loaders, such as this John Deere 325 P-Tier model, now lead in popularity over skid-steer loaders. (Image: John Deere)

However, more significant change has been the emergence of the compact track loader. These machines started to come to market in the late 1990s and early 2000s, but their popularity took off in the 2010s. By 2015, they were outselling skid-steer loaders, making them the highest volume construction machine in North America. By the mid-2020s, annual volumes were in the region of 100,000 units per year – more than 50% higher than the record number of skid steers sold, which occurred 20 years previously.

Skid-steer loader sales have declined as compact track loaders have surged in popularity. The simple conclusion is that the basic machine functionality required has not changed; it is more a switch in preference from a wheeled to a tracked undercarriage.

While a wheeled skid-steer loader is cheaper to buy and maintain than the crawler equivalent, compact track loaders have the advantage that they provide more traction. The pressure they exert on the ground is also much lower than a wheeled skid steer, so they can be used in softer conditions or in applications like landscaping where damage to the ground needs to be avoided.

Opening new applications

Chris Sleight is the managing director of Off-Highway Research, a market research and forecasting business specializing in analysis of the global construction and agricultural equipment markets. Formed in 1981 as part of The Economist Intelligence Unit (EIU), it is now the largest consultancy of its kind in the world, with offices in Chile, China, Germany, Japan, India, the U.K. and the U.S. OHR is part of the KHL Group. www.offhighwayresearch.com

This last point gives a clue as to why compact track loaders sell today in such staggering numbers. They can operate in situations and applications where skid-steer loaders didn’t work before. Their popularity is not just about the replacement of skid steers, but the fact that they are opening new applications to mechanization.

A final comment on the compact equipment market is the rising popularity of compact wheel loaders (under 80 hp). Although not a high-volume product, these machines have seen incredible growth over the last 10 years or so, with users being attracted by the higher seating position (and cushioned cab mounting) compared to skid steers.