Construction Equipment Manufacturers Forecast Continued Gains

• August
• 28

12:23 am construction equipment

Construction equipment manufacturers expect overall industry growth to continue through 2006, but at a somewhat slower pace than 2005, with gains predicted across U.S., Canada and other worldwide markets, according to an annual business survey conducted by the Association of Equipment Manufacturers(AEM). The AEM annual outlook forecast covers 68 whole machine product types and 18 types of attachments and components, grouped into seven general categories. The complete survey is available on the AEM website in the Industry Trends section.

In AEM’s latest outlook report, construction equipment business in the U.S. was antipated to close on a strong note for 2005, with increases of 13.9%, followed by 2006 growth of 9.3%. For Canada, construction machinery sales were predicted to gain 13% by yearend 2005 and then increase 8% in 2006. The forecast for other worldwide markets was 8.4% growth for 2005, followed by 2006 gains of 9%.

The state of the overall U.S. economy is the leading factor that will affect growth in 2006, according to the machinery manufacturers. Contributing to the overall economy are things such as consumer confidence and interest rates levels, and their effect on housing starts.

The impact of the highway bill on future business is also a major factor cited by manufacturers participating in the AEM outlook survey. After almost two years of short-term extensions, Congress passed a bill that was signed into law in August 2005, calling for total guaranteed funding of more than $286 billion for highway and transit programs through 2009.

Steel prices and availability have stabilized somewhat, but they still play a significant role in manufacturers’ ability to build and sell equipment, the AEM survey participants indicated. Other top issues identified by survey respondents include the strength of the U.S. dollar, underscoring the global scope of the industry, and rental company business, highlighting this major customer segment for many manufacturers.

For year-end 2005, earthmoving equipment sales were anticipated to increase 12.9% in the U.S and 14.3% for Canada. For 2006, earthmoving equipment sales are expected to increase 6.6% for the U.S., while increasing 6.8% for Canada and 11.3% for other export markets. The earthmoving segment includes excavators, backhoe loaders, haulers, motor graders, crawler tractors, scrapers, wheeled log skidders and trenching machines.