LONDON — CNH Industrial’s construction equipment business delivered a stronger second quarter than its agricultural division, highlighting the resilience of infrastructure and earthmoving markets even as manufacturers continue to navigate higher tariffs, rising production costs and uneven global demand.
The company reported that Construction net sales increased 12% year-on-year to $866 million during the second quarter of 2026, driven primarily by stronger shipments in North America, including deliveries that had been delayed from the first quarter.
The performance contrasted sharply with the softer agricultural machinery market, which remains under pressure from weak farm economics.
Although revenue improved, profitability remained challenging.
The Construction segment generated Adjusted EBIT of $15 million, down from $35 million in the same quarter last year, as higher tariff-related costs, increased labour expenses and continued investment in research and development weighed on margins.
Construction demand shows greater resilience
The latest results reinforce a trend emerging across the heavy equipment industry: construction activity is proving more resilient than agricultural machinery demand.
While many farmers continue postponing equipment purchases because of lower commodity prices and tighter financing conditions, infrastructure investment, commercial development and public works projects continue to support demand for construction machinery in key markets.
For manufacturers, that divergence is becoming increasingly important as they balance production schedules across different business segments.
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CEO points to disciplined execution
CNH Chief Executive Officer Gerrit Marx said the company remained focused on execution despite operating in a difficult market environment.
“Our second quarter results reflect disciplined execution by the CNH team in a market that remains at the trough of the agriculture cycle,” Marx said.
He added that CNH continues investing in both its machinery portfolio and technology while supporting dealers through changing market conditions.
Although his comments centred largely on agriculture, the stronger performance of the Construction business demonstrates how diversified equipment manufacturers can offset weakness in one market with strength in another.
North America continues to lead
According to CNH, North America remained the principal growth driver for the Construction segment during the quarter.
Higher machine deliveries, including shipments carried over from the first quarter, helped boost revenue despite ongoing economic uncertainty and trade-related cost pressures.
At the same time, the company continued investing in new technologies and product development aimed at improving machine productivity and customer value.
The results suggest contractors have remained willing to invest in new equipment where project pipelines and infrastructure spending remain strong.
Higher costs continue to pressure manufacturers
Despite stronger sales, the quarter also illustrated the financial pressures facing global equipment manufacturers.
Tariffs, higher labour costs and continued spending on innovation reduced operating profitability, highlighting that revenue growth alone is not enough to restore margins to previous levels.
Across the construction equipment industry, manufacturers are increasingly attempting to protect profitability through supply-chain optimisation, pricing discipline and efficiency improvements rather than relying solely on higher sales volumes.
CNH maintains positive outlook for construction
Looking ahead, CNH expects its Construction business to remain on a growth trajectory through the rest of 2026.
The company reaffirmed expectations for Construction net sales growth of between 5% and 10% for the full year and projected an Adjusted EBIT margin of 1.8% to 2.3%, signalling confidence that demand will remain supportive despite ongoing cost pressures.
CCE NEWS Analysis
CNH’s second-quarter performance offers a broader message for the construction equipment industry than the financial results alone suggest.
The company’s ability to grow Construction sales while its agricultural business remains in a cyclical downturn reflects the continuing strength of infrastructure-led investment in North America.
Contractors appear to be maintaining equipment replacement programmes where project backlogs remain healthy, even as manufacturers absorb higher operating costs.
However, the decline in construction operating profit is equally significant.
It demonstrates that the industry’s next challenge is no longer generating demand—it is converting stronger sales into sustainable profitability amid tariffs, labour inflation and continued investment in cleaner, smarter and more connected machines.
For contractors, the outlook remains encouraging. CNH’s decision to maintain its full-year growth forecast indicates confidence that equipment demand will remain resilient through the second half of 2026.
For equipment manufacturers, meanwhile, the focus is likely to shift from simply increasing deliveries to improving operational efficiency and protecting margins in an increasingly competitive global market.
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