Global sales projected for moderate 2008 growth
Jan 1, 2008 12:00 PM
The Construction equipment manufacturing industry expects overall United States and Canadian business to remain flat through the end of 2007 but rebound in 2008, while sales to worldwide markets should continue strong through 2007 and into the next year, according to the annual forecast of the Association of Equipment Manufacturers (AEM).
The North American-based international trade group representing the off-road equipment manufacturing industry, AEM surveys its construction equipment manufacturer members annually about expected sales of the machines that build, repair, and maintain America's and the world's roads, bridges, dams, houses, offices, schools, and other public and private infrastructure.
In the latest survey, overall construction equipment demand by year-end 2007 is predicted to decline 1.9% in the United States and remain flat in Canada, perhaps dipping 0.1%, while worldwide business is anticipated to increase 9.9%. In 2008, growth is expected in the United States, Canada and worldwide, with the biggest gains in global markets — an increase of 2.8% for the United States and 2.9% for Canada, and growth in worldwide markets of 8.0%.
The AEM outlook asked respondents to rank the influence of several factors on future construction equipment sales. As expected, the impact of the housing slump was a key factor, as well as the state of the general economy, including interest rates and credit availability. Adequate transportation funding also will have a major impact on the business of many as will rental company demand, according to the survey.
Construction machinery manufacturing is export-intensive, and the strength of the dollar against other currencies will likely affect business growth. Machinery makers also cited commodity shortages and prices, including steel and energy.
“Overall, we've seen a slowdown in the past year or so, but it comes after some very good years for the industry,” notes AEM President Dennis Slater. “The residential housing slump in the United States has sent ripples across the entire economy, not only construction. However, growth in non-residential construction continues to offset housing market losses. For equipment manufacturers, the continued global demand for construction machinery is also balancing the slowdown in our domestic business.”
Sales of concrete and aggregate equipment are anticipated to increase 4.0% in the United States by year-end 2007 and show gains of 5.7% for Canada and 8.7% for other worldwide markets. Market predictions for 2008 are growth of 5.2% in the United States, gains of 6.2% for Canada, and increases of 10.1% in other worldwide markets.
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