AEM Outlook Projects Continued Gains

November 2, 2005 — Construction equipment manufacturers expect overall industry growth to continue through 2006, but at a somewhat slower pace than 2005, with gains predicted across U.S., Canadian and other worldwide markets, according to an annual business forecast recently released by the Association of Equipment Manufacturers (AEM).

 

Each year, the North-American based AEM trade group polls its construction equipment manufacturer members on anticipated industry-wide performance. The annual forecast covers 68 whole machine product types and 18 types of attachments and components, grouped into seven general categories. The survey, which is conducted in the third quarter of the year, outlines manufacturers' estimates of year-end business volume for the current and next year.

 

In AEM's latest outlook report, construction equipment business in the U.S. is anticipated to close on a strong note for 2005, with increases of 13.9 percent, followed by 2006 growth of 9.3 percent. For Canada, construction machinery sales are predicted to gain 13 percent by year-end 2005 and then increase 8 percent in 2006. The forecast for other worldwide markets is 8.4 percent growth for 2005, followed by 2006 gains of 9 percent.

 

"Our economy has been robust, and equipment sales very strong, with 2004 and 2005 among the industry's best in recent years,” said AEM Chairman Charles Stamp, Vice President Public Affairs Worldwide for Deere & Company, Moline, Ill. “Business volume remains solid but our members collectively do not believe this level will be sustained."

 

The state of the overall U.S. economy is the leading factor that will affect growth, say construction machinery manufacturers as they look to 2006, including consumer confidence and interest rates levels, and their effect on housing starts.

 

"The housing market is a key driver of our industry's sustained business growth,” Stamp said. “We continue to enjoy an exceptionally long period of historically low mortgage interest rates. Consumer confidence has remained moderately positive but could turn negative with rising interest rates and escalating energy costs."

 

Sales of lifting equipment by year-end 2005 are predicted to gain 29 percent for the U.S. and 19.9 percent for Canada, while increasing 6.4 percent for other worldwide markets, according to the AEM annual outlook report. Sales are expected to increase 17.7 percent in the U.S. in 2006, anticipated to grow 15.1 percent for Canada, and predicted to gain 7.6 percent for other worldwide markets.

 

The business volume for attachments and components is predicted to show year-end 2005 gains of 9.9 percent in the U.S., 7.7 percent for Canada, and 6.3 percent for other worldwide markets. Shipments in 2006 are expected to grow by 6.3 percent in the U.S., 5 percent for Canada, and 5.2 percent for other worldwide markets.

 

For more information, read the original report.