Construction Machinery Industry Predicts Smaller Gains in 2007

Construction machinery manufacturers predict smaller gains in overall industry business in 2007, following expected double-digit growth in 2006, according to the annual outlook forecast conducted by the Association of Equipment Manufacturers (AEM). Growth is expected for the U.S., Canadian and worldwide markets, with the strongest growth anticipated in the global markets.

Machinery manufacturers participating in the annual AEM outlook survey expect overall construction equipment business in the U.S. to close out 2006 with increases of 11.2 percent compared to the previous year and that business volume to Canada will gain 12.7 percent by year-end 2006. Sales to other worldwide markets for 2006 are anticipated to grow 10.9 percent.

Looking to 2007, survey participants forecast increases of 3.9 percent for the U.S. and expect business volume to Canada to increase by 5.0 percent. They anticipate growth of 6.4 percent in other worldwide markets in 2007.

Each year, the AEM North American based international trade group polls its members on expected industry performance.

The AEM outlook survey asks respondents to rank the influence of several factors on future construction equipment sales. The state of the general economy, including interest rate levels and consumer confidence, are top factors. Housing starts and highway funding will also have a major impact on the strength of the industry, according to the survey respondents. Other key issues are steel prices and energy costs.