For those of you that know me you might also know that I have now spent most of my career working in construction equipment – from my early days in JCB, my growth years at Terex Construction (with the Benford/Fermec/Schaeff products and others), my later rebirth at JCB (second time around) and most recently here at Tegfan Plant & Machinery in Wales as I switch from OEM to dealer sales and see what life is like at the sharp end. I have now been lucky enough to work with most equipment types in one way or another over the years, so I think (hope) I have a reasonable enough understanding of the industry (there is always so much more to learn – every day is a school day!). So as a rather wet and soggy 2025 starts to come to an end and we prepare for 2026, I have decided to have a bit of fun by dusting-off my crystal ball and had a stab at answering the big questions that everyone is asking: What is in store for the construction equipment industry? What are the trends ahead in 2026 and beyond? How will this affect the UK? And most importantly, how will this affect your business and what you plan to purchase next year? Here’s my own personal view (Bias Alert!*) – I would love to hear what your thoughts are.
Was 2025 a good or bad year?
All the latest data from trade bodies such as the CEA, VDMA, CECE so far suggests that 2025 was seeing growth compared to 2024, and my own experience supports that – sales were up for many products (not all) and confidence was growing. Good, right? Well, here’s the thing. Sadly it also now seems that this was possibly business done earlier in the annual cycle, and the market may be contracting sharply in the back end of the year (industry data will confirm this). The feeling I get from social media and speaking to people every day is that UK confidence is definitely on the wane driven by the wider economy and the current high tax/high cost of doing business in the UK.
We have also had the awful news recently of several well-known construction and agricultural equipment dealers going to the wall, as well as countless end-users too, leaving people without a job just before Christmas, so we hope that those affected can find alternative employment elsewhere.
There is still a lot of business to be had out there, but some customers are delaying some non-essential purchases and we may well see that the growth has flattened off until things change in Government policy.
So what COULD 2026 be like?
We could see the market start to contract through early 2026, and this will be driven by the big plant fleets as they delay large purchasing deals in an uncertain market. For the vast majority of customers it will be business as usual, as older machinery will wear out and need to be replaced if it is beyond reasonable economic repair, but the bullish confidence of early 2025 will be replaced by a less confident 2026. Compact and mid-range machinery should remain steady but heavier machinery may reduce as companies seek to reduced their expenditure, so aftermarket support and parts for existing machinery will be critical.
Compact Machinery
Mini excavators and site dumpers are always a good bet in the UK, as these are the machines that get the essential repairs done, along with small compaction machinery, so the overall number may decline due to the reduction in major national fleet deals but the rest of the market will hopefully remain reasonably strong. Market leaders such as Kubota and Thwaites have built their name on building the best product possible so are always a good place to start.
Skid steer loaders and compact tracked loaders are also growing in popularity due to their multifunctionality so the new SVL75 CTL from Kubota and the Kioti SL750 skid steer are sure to gain new admirers, although we won’t see many on larger sites due to the current lack of UK operators.
Telehandlers
Larger, more expensive capital investments may see a sharper contraction – the bulk of the telehandler market may struggle due to the focus on larger fleets, but we will probably continue to see growth in small/compact handlers like the Merlo P27.6 and Kubota KTH4815-2, and also in large rotary machines such as the Merlo ROTO series as these are now also replacing some mobile cranes and large MEWPS.
Large Excavators and Wheel Loaders
I expect the overall heavy excavator market to contract at the heavier end of the scale and again on some bulk fleet deals (as well as ADTs), but many customers will still see a strong need for machines up to 14 or 22 tonnes, and the growth in wheeled excavators in the UK will also be reasonably stable due to the specialist nature of the work they do. There will be a lot of choice in these key segments – with new entrant Kubota’s U145 is sure to win some customers over – so you don’t have to stick to your previous supplier.
Larger wheel loaders will also struggle as the market softens, but smaller units like the fabulous Kubota R090 will continue to be needed in niche segments where these have proven to be highly productive despite their size.
Light Equipment
Hand-held equipment such as compaction plates and trench rammers will also probably stay healthy as these get a lot of abuse and will invariably need replacing on a regular cycle. The risk here is that as they are so low cost to produce (compared to a mini excavator for example) that the market is becoming flooded with low cost/ low quality units produced in China and sold online, and this will definitely result in buyer’s remorse for some users when the units break and cannot be repaired. Good dealers will only sell quality, proven brands if they want to keep customers – for example, Tegfan are a dealer for the excellent MBW (USA) range and have found these to be tough and reliable pieces of kit with our customers.
Backhoe Loaders
There has been a lot of talk about the “death” of the backhoe loader, and this is driven by the huge reduction in buyers in the UK as they have moved to excavators. Some manufacturers are working hard to drive backhoe usage back up again through demonstrating the efficiency of these “Swiss-Army knife” machines and get more operators in training, but it may be too little too late. They will remain a viable machine for people working between multiple sites, particularly in rural areas, but the limited number of manufacturers selling in the UK means that choice is limited, restricting choice and innovation. The latest versions with dual-drive and all the options mean that backhoes have closed the gap a little, but this will only last if they can be as reliable as an excavator too.
2D (or Not 2D)
More UK customers are also looking to use 2D and 3D systems to improve efficiency and accurate in earthmoving, so expect to see growth in this as factory integrated options or lower-cost aftermarket solutions as unit cost reduces (like sat navs did in cars). The industry still hasn’t settled on a standard for this, so feel free to shop around for the best solution for you. Aftermarket solutions may be a better fit for you than factory installations, although the inevitable journey to increased automation created by lack of skilled operators means that more and more manufacturers will need to integrate this into their machines alongside a move to Electro-Hydraulic systems, but many smaller operators won’t see this as useful for many years unless they can see the financial benefit and savings that these systems can bring.
Telematics
A factory fitted telematics and tracking device like the Kubota Tracking System is sure to give you extra peace of mind through showing location tracking and machine health, and more manufacturers are fitting the hardware now as standard and including a free subscription too for larger machines. The benefits are many but can only be realised if the owner has the time and inclination to use it to its full potential.
Diesel, Electric or Hydrogen?
Electric models have been pushed by politics and the green agenda, but for many customers they don’t appear as a viable alternative when the additional cost of purchase and the replacement cost of batteries is taken into account against their residual values. It is probably a great solution for certain applications where noise and emissions are important, but for most customers diesel will remain the only viable solution. I also don’t expect hydrogen to take off any time soon as this also has a lot of questions to answer about practicality (not just the huge cost of Hydrogen but also the energy output from it as well as issues with the supply network) before we will see fleets of these in every area. My advice is stick with diesel as you can fix it much easier too.
So what does this mean for your business?
The overall economy looks generally flat due to the incumbent Government and the latest budget was pretty bad but (thankfully) not as bad as many plant businesses feared, so we can only hope that the demand for our machinery remains strong too. Roads will still need to be repaired and homes will still need to be built, so construction should be more resilient than many industries, although the purchase of new machinery may be delayed by some depending on their exposure. If this is happens then the importance of parts and service support by dealers will increase (made more challenging by the national lack of enough qualified and experienced service engineers).
In a challenging economy all businesses need to fully understand the long-, medium- and short- term implications of their purchasing decisions, to make sure that the right equipment is being selected from the right suppliers with the best aftermarket support.
For example, many customers are now standardising on higher specification excavators with twin auxiliary hydraulics as this enables the machines to do more with more attachments. And more attachments will also be a wise investment, as people seek to maximise the efficiency and productivity of their machines through technology – a Kubota high-spec mini excavator with a hydraulic quickhitch and a Kinshofer NOX tiltrotator would make more sense than a cheap Chinese excavator without the spec, support and reliability to keep the investment going. Residual values will also be important to protect the investment in the longer term, and these can only be kept strong through selecting the quality brands at the top of the industry. I love selling trusted, quality brands such as Kubota, Merlo and Thwaites because these are the manufacturers with the strength to keep going when the market reaches the natural downturn in the cycle.
Winners (and Losers)?
We can definitely expect more consolidation in the industry as more and more companies seek to be “full line” suppliers – the recent news that Doosan Bobcat (no relation to the Doosan that became Develon that is now part of HD Hyundai) is looking to buy Wacker Neuson is a perfect example of the potential massive changes that the construction equipment industry is going through. How this plays out with UK distribution will be interesting to see as there may be some major consolidation and changes to follow.
The change of the established Hitachi brand to the unknown Landcros one is also interesting, as many are unsure of how this will change their own fortunes (we might learn more on the reasoning behind it too). Will they increase sales due to a new name or will they lose some in the confusion of change?
Industry giants with strong brands and support such as Caterpillar, Volvo and Liebherr will most likely continue to do what they have always done so well, and keep their focussed heavyline range up to date and at the cutting edge of technology, without being diverted too far by compact machinery, and it will also be interesting to see if there is any change to Komatsu’s performance with Marubeni Komatsu being sold to McHale Plant Sales. Some smaller users often struggle with the larger companies as they might not get the same level of support as the bigger accounts.
Will JCB grow or continue to underperform with certain non-core products as the leadership changes? Can they bridge the huge gaps in their product ranges and how will their sales be affected by having such a diverse range? Can they fully bridge the gap between their amazing brand and reality? Only time will tell, but to do so will be very challenging against such strong competition.
We have seen many full-line manufacturers struggle to have the same range and innovations on all products as the more specialised niche manufacturers, and this is too often seen in their quality and reliability statistics too.
The ongoing changes at Hyundai and Develon will also be interesting as we see how they differentiate the two brands and dealer networks, and likewise the sale of Genie by Terex will also be interesting to see which purchaser expands into access products. The rest of the bigger brands may not change much externally – they might acquire a smaller company or divest a weak division – but most of the changes will be behind the scenes as they reorganise internally to be more efficient and bring new models to market as quickly as their new Chinese rivals. There could also be some big surprises as some of the most established brands are swallowed up in mergers and acquisitions – Sumitomo have been rumoured to have been for sale for many years so will they be a brand that grows briefly before being swallowed up too?
The sale of Mecalac by Fayat Group was interesting this year and we will have to see how this changes the company’s unique approach to construction machinery, while John Deere is still rumoured to be looking to sell its construction machinery brand into Europe, so we can reasonably assume that they will be preparing bids for any company with a strong dealer network that struggles.
We can also expect established specialist companies such as Kubota, Merlo, and Thwaites to do well in a market where customers for their established, focussed products will be more selective about the long-term nature of their investments.
We have seen a flood of new Chinese brands of late – Sany, Liugong and XCMG trying to break away from the pack and become accepted as viable alternatives to European/Japanese products – but questions must be asked of how many of these have the ability to survive in the longer term without the inbuilt specification, quality, reliability plus aftermarket support of the more established brands. Will Sunward and XCMG be able to reach the same level as Sany and Liugong? Will we see Shantui, Zoomlion and Lovol make a similar push for the UK market? Probably not. There are hundreds of brands in China and most of them will fail outside of the protection of China itself due to the issues with distribution, and the same applies to India as it becomes more globalised. We all saw how the number of car and commercial vehicle industries shrank in the number of manufacturers from its peak after World War 2, so we can expect construction equipment to follow suit and maybe 2026 will see a lot of change. I don’t foresee Chinese brands taking over but they are clearly here to stay and a handful of the best will be here to stay, just like the Japanese and Korean manufacturers did before them. Most buyers will stick with brands they know and trust.
There may now be too many brands for the industry, with none of them able to reach their business targets as the stronger brands and dealers can often out-compete them, but innovative, flexible and responsive manufacturers will always do well as long as they can back their products up with the right level of support.
So, if we do lose any more brands and dealers then the biggest loser will always sadly be the end customer, stuck high and dry without the support or parts they were promised. How will an alternative dealer support a customer out of region if a machine goes down three or four hours away? Will the customer still be expected to pay the full mileage rate for the repair work if its out of warranty? Where will the parts be if a larger dealer goes pop without an immediate replacement? An established dealer with regional focus is always better at local aftermarket support than a larger concern.
The dealer is clearly the defining factor in the success of any of these brands going forwards, but with all of the changes happening in the industry as it goes through another period of major change, choosing the wrong manufacturer or dealer could cost you in the long term.
Some final words of advice
So my advice is simply to Choose Wisely – the key question is the level of dealer support and if the product is designed for reliability and low cost of ownership.
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With Tegfan Plant Sales and our distribution of quality brands such as Kubota, Thwaites and Merlo you can be sure that we will keep you working through 2026 (when others might not).
*Please note: Tegfan Plant & Machinery is a dealer for Kubota, Thwaites, Merlo, MBW and other premium brands – this is reflected in the article above.
Adrian Hyde
10/12/2025
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