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CE Industry Sustains Strong Momentum in Feb 2026

2026-04-30

The Indian construction equipment (CE) industry continued its growth trajectory in February 2026, with the latest PMI data indicating robust expansion across all major segments. The overall CE PMI stood at 66, firmly placing the industry in expansionary territory and reflecting sustained demand, healthy order books, and ongoing infrastructure-led momentum.

This broad-based growth underscores the resilience of the sector, driven by government spending, seasonal demand patterns, and spillover effects from earlier policy initiatives. Notably, all key equipment segments reported PMI readings above 50, signalling continued expansion and positive business conditions.

Broad-based growth across segments

Among the segments, concrete equipment and road construction equipment led the pack with a PMI of 69 each, followed closely by material handling equipment at 68. Earthmoving and material processing equipment also recorded strong performance with PMI scores of 63 each.

The consistency of expansion across segments highlights a well-distributed demand environment, rather than growth being concentrated in a few pockets. This is particularly significant for an industry that often experiences cyclical fluctuations based on project pipelines and funding cycles.

Concrete equipment stood out with strong demand driven by increased construction activity and higher offtake. Similarly, road construction equipment benefitted from seasonal demand, infrastructure push, and pre-summer project execution planning. Material handling equipment saw robust traction due to demand from construction, railways, and industrial infrastructure, while earthmoving and material processing segments gained from mining, infrastructure, and export-driven activity.

Demand momentum and capacity expansion

Sub-component indicators of the PMI reveal strong demand fundamentals. New orders and output both registered high readings of 76, indicating accelerated expansion and healthy production activity.

Employment also showed positive momentum with a PMI of 59, suggesting selective hiring to support increased production requirements. This aligns with industry trends of cautious workforce expansion, complemented by automation and process optimisation.

Inventory indicators present a balanced picture. Purchased stocks at 59 reflect proactive inventory build-up to meet demand, while unsold stocks at 42 indicate efficient demand absorption and lean channel inventories.

However, supplier delivery times remained constrained, with a PMI of 42, pointing to supply-side challenges, particularly in raw material availability.

Cost pressures persist

One of the most notable trends in the February data is the continued pressure on input costs. Input prices recorded a high PMI of 85, driven largely by rising steel prices, forex fluctuations, and broader commodity inflation.

Despite this, output prices increased only moderately, with a PMI of 52, indicating limited pass-through of costs to customers. This reflects a competitive market environment where manufacturers are absorbing part of the cost burden to maintain demand and market share.

This divergence between input and output prices remains a key concern for OEMs, potentially impacting margins if sustained over the coming months.

Segment-wise highlights

Earthmoving equipment: With a PMI of 63, the segment maintained steady growth, supported by demand from mining, industrial infrastructure, and road construction. Mining emerged as the largest contributor, accounting for 21 per cent of demand. Strong new orders and output were complemented by improved inventory management, although supplier constraints and rising input costs remained challenges.

Material handling equipment: Recording a PMI of 68, this segment saw strong growth driven by construction, road projects, and railways. New orders and output surged, while low unsold inventory levels indicated strong demand absorption.

Concrete equipment: At a PMI of 69, the segment demonstrated robust expansion, with new orders and output both at very high levels. Demand was primarily driven by road construction (34 per cent) and the broader construction sector (30 per cent).

However, the segment also faced the sharpest increase in input costs, along with severe supply constraints.

Road construction equipment: Also at PMI 69, this segment benefitted from strong government focus on road infrastructure, with road construction accounting for 65 per cent of demand. Improved plant efficiency, automation, and export demand supported output growth, although supply chain challenges persisted.

Material processing equipment: With a PMI of 63, the segment saw growth driven by mining and construction, each contributing 21 per cent to demand. Strong output growth, minimal unsold inventory, and positive sentiment across all respondents indicate a stable outlook.

Positive outlook ahead

The forward-looking indicators suggest continued optimism in the industry. Across segments, a significant proportion of respondents expect business conditions to improve over the next three months.

Forecast data also supports this outlook, with stable domestic sales and export projections over the coming months. The overall forecasting model showed zero error variance for February 2026, indicating a high degree of accuracy and reliability in projections. At a broader level, the four-quarter rolling forecasts point to sustained growth, driven by infrastructure investments, government spending, and increasing mechanisation across sectors.

Conclusion

As India continues to invest heavily in infrastructure development, the construction equipment industry remains a critical enabler of growth. The February PMI data not only highlights current strength but also signals sustained momentum in the months ahead.

While cost pressures and supply-side challenges require careful management, the overall outlook remains firmly positive. With strong demand drivers, improving operational efficiencies, and continued policy support, the CE industry is well-positioned to maintain its expansionary trajectory through 2026.

Key takeaways

The 2026 PMI report reinforces the strong fundamentals of the Indian construction equipment industry. The key themes emerging from the data include:

• Broad-based expansion across all equipment segments

• Strong demand reflected in high new orders and output levels

• Efficient inventory management and lean channel stocks

• Persistent input cost pressures with limited pricing power

• Supply chain constraints impacting delivery timelines

• Positive business sentiment and stable growth outlook