The new year did not begin with a bang for agricultural machinery, with the Tractor and Machinery Association (TMA) reporting January sales indicate the slow-down has become a full blown decline.
TMA, executive officer, Gary Northover said there was another tough year ahead for tractor sales.
“What began as a slow down in the market midway through 2018 has now turned into a widespread state of decline for agricultural machinery sales in Australia,” he said.
“The industry struggled to the 12,000 tractor level last year but early indications are for 2019 to be well down on this amount.”
Mr Northover said continuing drought and hot conditions over January saw tractor sales back 12 per cent on the same period last year.
When broken down by category, the above 150 kilowatt (200 horsepower) segment was the hardest hit, with the TMA reporting a sales drop of 22pc.
Sales in the other categories, under 30 kilowatt (40 horsepower), 30-75kW (40-100hp) and 75-150kW (100-200hp) were back 10pc for the month.
Mr Northover said overall the story across the nation was pretty grim, though some districts had bucked the trend.
“Sales in Victoria were in line with last year due mainly to the favourable conditions in the Western District which has experienced a bumper season, this has offset the difficulties being felt in the Wimmera and Gippsland districts,” he said.
“NSW continues to be hard hit being 21pc behind last year, Queensland began the year 10pc down and Western Australia, the star of the show in 2018 had an off month, down 6.5pc.
“Elsewhere, South Australia was down 18pc, Tasmania behind a whopping 40pc behind whilst the NT posted sales ahead of last year.”
Mr Northover said harvester sales remain a problem for dealers.
“Well down in 2018, early signs are for another year of declining sales,” he said.
“This ought to lead to reasonable parts and service sales maintaining older machines and a backlog of sales opportunities when conditions do improve, but this is cold comfort for now.”
Mr Northover said one positive was the hay machinery market.
“Baler sales had a great start in January with double the number sold last January,” he said.
Beyond the drought
Mr Northover said beyond drought conditions there were a number of other factors likely to impact on machinery sales in 2019.
“Notwithstanding the climatic conditions being experienced across the country, there are considerable headwinds expected which will have an impact on the profitability and, indeed the viability of some dealers,” he said.
“2019 is a federal election year and, if history is any guide, this tends to cause buyers to hesitate when it comes to making purchasing decisions.
“We are beginning to see price increases being applied to imported machines both as part of the normal pricing cycle but also due to the increasing cost of inputs such as steel resulting from the imposition of tariffs in the US.”