Construction equipment manufacturers forecasting modest growth in 2008

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).

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, repair and maintain America's and the world's roads, bridges, dams, houses, offices, schools, and other public and private infrastructure.

In the latest AEM outlook survey, overall construction equipment demand by year-end 2007 is predicted to decline 1.9 percent in the United States and remain flat in Canada at minus 0.1 percent, while worldwide business is anticipated to increase 9.9 percent.

In 2008, growth is expected in the United States, Canada, and worldwide, with the biggest gains in global markets — an increase of 2.8 percent for the United States and 2.9 percent for Canada, and growth in worldwide markets of 8.0 percent.

The AEM outlook survey 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 will also have a major impact on the business of many, according to the survey, as will rental company demand. Construction machinery manufacturing is export-intensive, and the strength of the dollar against other currencies is also expected to affect business growth. Machinery makers also cited commodity shortages and prices, including steel and energy.

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