Lord Bamford, chairman of construction equipment manufacturer JCB has warned that its 2013 results are likely to be disappointing due to instability in the Indian economy this year.
India is JCB’s largest market in terms of sales and the economic slump experience there earlier this year will have a significant impact on JCB’s 2013 financial performance said Lord Bamford.
The chairman also predicted that, with India’s general election looming, the market is likely to remain uncertain for some time.
Turning to more positive news however, Lord Bamford added that the decline in the Indian market will be compensated for to some extent by increasing construction activity in the UK and US.
“The UK is seeing a lot of investment in infrastructure. Its not as depressed as it was a year ago,” he said.
JCB is not the only construction equipment manufacturer to have downwardly revised expectations for financial performance this year thanks to slowing growth in BRIC nations.
In October, its rival Caterpillar announced that reduction in mining activity globally, but particularly in China, will negatively impact its full year results.
JCB’s sales of backhoe loaders are expected to fall from 32,000 in 2012 to 25,000 this year.
The firm’s confidence has not been dented by this reduction however. Following the Autumn Statement, JCB announced it will make the single largest investment in its history over the next five years, ploughing £150m into site development and creating 2,500 direct jobs. A further 7,500 are expected to emerge in its supply chain.