Tough road ahead for construction equipment makers

The AEM said in its annual outlook survey that it expected business declines in the US of 8.6% for calendar 2008, followed by flat growth in 2009 of 0.04%.The survey is designed to provide a snapshot of construction machinery manufacturers’ predictions for the rest of 2008 and 2009 business in the US, Canada and worldwide.Canada is predicted to fare better, with business stabilising at minus 1.7 percent for 2008, followed by 2.2 percent growth in 2009. 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 AEM annual outlook forecast covers 72 different whole machine product types and 19 types of attachments and components, grouped into seven broad categories: earthmoving, lifting, bituminous, concrete and aggregate, light equipment, attachments and components, and miscellaneous equipment. AEM consolidates manufacturers’ estimates of overall business activity. Each forecast in the survey is the average of responses from companies in each product line, predicting industry wide expectations rather than individual company performance, and unit sales rather than company profitability. The survey was conducted in third quarter 2008 with many of the responses prior to the US financial market collapse.”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 US,” said AEM President Dennis Slater.“The continued financial turmoil is affecting commercial projects as well,” he said. “While the strength of the global economy has spurred equipment export growth, we now face a slowdown here as well.” “This is certainly a challenging and unpredictable time,” Slater said. “But we have learned from previous downturns how to operate more efficiently, and we are positioned for a rebound, hopefully as 2009 progresses, and into 2010.” He said government measures to boost infrastructure investment would play a critical role in the US construction equipment industry’s recovery as well as strengthening the US economy overall.

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