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According to a new survey and study completed by the Association of Equipment Manufacturers (AEM), strong growth in the construction and agricultural industries makes manufacturers optimistic about the prospects for 2022.

More than 80% of AEM members expect the demand for construction and agricultural equipment to increase next year. In addition, nearly two-thirds of people believe that the demand for agricultural equipment will be higher than normal. AEM has more than 1,000 members in the construction and agriculture industry, representing more than 200 product lines.

As farmers continue to update their old equipment production lines, the report is established in the coming year. AEM reported in its November 2021 Agricultural Tractor and Combine Harvester Report that total tractor sales increased 8.7% from November 2020. This figure includes sales of 100-horsepower and above two-wheel drive tractors in November 2021, up 30.9% from November 2020.

Compared with the same month in 2020, the sales of four-wheel drive tractors in November 2021 did fall by 23%. But this only represents the decline of 46 four-wheel drive tractors. Year-to-date in 2021, four-wheel drive sales have increased by 17.1% compared to January-November 2020.

Joint sales are still very strong. In November 2021, sales of self-propelled combine harvesters increased by 37.8% compared to November 2020. Year-to-date, combined harvester sales have increased by 25% compared to the same period in 2020.

Although agricultural and construction manufacturers believe that there will be a positive sales trend in 2022, AEM has identified several major challenges.

- It is difficult for agricultural equipment manufacturers to fill vacant positions. Approximately 87% are working hard to fill manufacturing positions, and 70% are working hard to recruit office staff.

- Approximately 95% of manufacturers are affected by supply chain issues. Nearly three-quarters believe that the interruption is getting worse.

- Most AEM members believe that supply chain problems will continue until 2022 (68% in agriculture and 58% in construction). A small percentage (14% ag, 11% construction) believe that these problems will continue into next year. Semiconductors and variable frequency drives are one of the most popular products.

- From August 2019 to August 2020, most key construction and agricultural equipment categories remained stable. However, in the past 12 months, inflation has risen. The overall consumer price index rose by more than 5%. However, several equipment categories rose faster: agricultural machinery accessories, up 12.67%; agricultural plows, rakes, road rollers, shredders and accessories, up 11%; planting, seeding, and fertilizing machinery, up 8.07%.

But on the positive side:

-Farm buyers feel a little bit rushed-and want to buy some steel. Benjamin Duyck, director of market intelligence at AEM, said: "It is estimated that farm net income will increase by 19.6% in 2020, and it is expected to increase by 19.5% in 2021 to reach 113 billion US dollars." "Farm net income is at its highest level since 2013, compared with 2000- The 2020 average is 20% higher.” He added that American farmers have also seen the best debt-to-equity ratio and debt-to-asset ratio since around 2004, although they are expected to decline slightly in the coming months.

- AEM members told their manufacturing associations that they believe the growth of most key agricultural equipment categories will be similar to this year-as well as accessories for working soil, seeding and fertilizing, and irrigation and sprayers.

- 44% of AEM agricultural members believe that the global economy will recover next year.

- Approximately 70%-74% (agriculture and construction) believe that the US economy will recover next year.

- 75% to 80% of people believe that their individual company will recover within a year.

You can contact Dan Miller at dan.miller@dtn.com

Follow him on Twitter @DMillerPF

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