Construction Equipment Slump Likely to Continue

Construction equipment manufacturers expect industry business to continue to decline through year-end 2001, and show little to no growth in 2002, according to an annual forecast by the Construction Industry Manufacturers Association (CIMA).

Machinery manufacturers participating in CIMA's annual Outlook survey expect year-end business in the United States to drop 12.8% for 2001, and record 0.5% growth in 2002. For Canada, construction machinery shipments are anticipated to drop 11.3% by year-end 2001 and decline 0.7% in 2002. Industry worldwide business is anticipated to drop 2.7% for 2001, followed by a 1.1% decline for 2002. CIMA conducted its Outlook report in third-quarter 2001, with most responses received before the September 11 terrorist attacks in the United States, so estimates may go lower in the next few months.

The state of the general economy is the overriding concern of equipment manufacturers across all product lines, especially the impact of a faltering stock market and the uncertainty of continued consumer confidence.

US public works spending and lower interest rates were cited as positive factors that would impact future business volume. Manufacturers called continued excess inventories a significant factor that would negatively impact future sales. Changes in distribution channels, particularly in rentals, will also play a role in the demand for machinery.

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