New machinery demand falls to pre-Covid levels

The demand for new machinery has returned to pre-Covid levels, with an abundance of inventory, price reductions and reduced interest rate deals failing to garner a significant upswing in sales during October.

The Tractor and Machinery Association of Australia reported that sales of agricultural tractors continued to soften last month, with about 1,100 tractors sold in October - which is 9% below the same time last year.

The report stated: "On a year-to-date basis, the industry is about 25% below the same time last year although in dollar terms, the decline is close to 14% reflecting a greater drop in the below 100hp range."

Influencing factors remain unchanged from previous months, dealers have an abundance of inventory, price reductions are occurring along with reduced interest rate deals.

The association reported: "The only thing missing is a sense of urgency on behalf of the customer which is not unexpected given the experiences of the past three years or so. One can see, however signs of improvement, this is the first month in some time that was within 10% of the same month last year buoyed but a strengthening in the larger ranges. The next few months will tell whether this trend is sustainable."

Looking at the state-by-state picture all states were down except for Victoria which saw a rise of 13% against the same month last year, but remains 21% behind year to date. 

Queensland was behind by 12% against the same month last year to be 22% behind year to date, NSW was down 8% and remains 32% behind for the year, while Western Australia reported a drop of 20% to be down 13% compared with the same time last year. 

South Australia had another big decline, off a whopping 31%, now down 31% YTD, Tasmania was off 22% for the month with sales in the NT finishing 33% down.

Sales in each of the reporting categories were off this month. The small under 40 hp (30kw) category was down by 11% to be 22% behind year to date. The 40 to 100hp (30-75kw) range was down, this time by 16% and is now behind 35%year to date and the 100 to 200hp (75-150 kw) category reported a drop of 1% for the month and remains 23% down YTD.

The 200 hp (150kw) PLUS range was 7% down compared to the same month last year and is now 12% behind year to date.

The report also showed that sales of Combine Harvesters are not keeping up with last year and currently sit 25% behind on a year-to-date basis.

"As with tractors, the market has been well stocked over the past few years and some tapering is to be expected," it read.

Baler sales have paused their recent strong run and were down 21% against the same month last year and are just on 10% behind year to date.

In a bright spot for the industry, out-front mowers were up a massive 42% in the month in time for mowing season.