Equipment Manufacturers Forecast Tough 2009

The construction equipment manufacturing industry expects continued business declines in the United States through year-end 2008 of 8.6 percent, followed by flat growth in 2009 of 0.04 percent, according to the annual “outlook” survey of the Associated Equipment Manufacturers (AEM).

The AEM survey provides a snapshot of construction machinery manufacturers’ predictions for overall year-end 2008 and 2009 business in the U.S., Canada and worldwide.

The survey predicts Canada will fare better, with business stabilizing at minus 1.7 percent for 2008, followed by 2.2 percent growth in 2009. Sales to worldwide markets are anticipated to increase 8.5 percent by the end of 2008 and gain 5.4 percent in 2009.

The AEM is the North-American based international trade group representing the off-road equipment manufacturing industry. Each year it surveys its construction equipment manufacturer members about expected sales of the machines that build and repair roads, bridges, houses, offices, schools and other infrastructure in America and worldwide.

“The overall slowdown of the past year or so, after record expansion, accelerated this fall with a worsening housing market and collapse of major financial institutions in the U.S. The continued financial turmoil is affecting commercial projects as well. While the strength of the global economy has spurred equipment export growth, we now face a slowdown here as well,” says AEM President Dennis Slater. “This is certainly a challenging and unpredictable time. But we have learned from previous downturns how to operate more efficiently, and we are position for a rebound, hopefully as 2009 progresses, and into 2010. Government measures to boost infrastructure investment will  play a critical role in our industry’s recovery as well as strengthening the U.S. economy overall.”

The AEM outlook survey asked respondents to rank the influence of several factors on future construction equipment sales. Not surprisingly, respondents cited the state of the general economy as a key factor affecting future industry growth. Specifically, the level of housing starts and highway funding will be a major influence on construction equipment business volume. Continued export demand, and the relative strength of the U.S. dollar, will also affect sales, and the price of steel and other commodities continue to be a concern.

More information is available at www.aem.org.