Equipment manufacturers expect slowdown

Construction equipment manufacturers expect double digit increases in business in the US, Canada and the rest of the world this year, but have forecast slower growth for 2012 to 2014.

The Association of Equipment Manufactures (AEM) annual construction equipment business outlook survey revealed that manufacturers expect overall business in the US to grow +18.6% this year, while Canadian business is expected to grow +14.7% and the rest of the world is expected to grow +14.7%.

However, manufacturers expect US construction machinery business to grow +10.8% in 2012, while Canadian business is forecast to be +9% higher next year and business in the rest of the world is forecast to grow +10.5%.

For 2013, respondents predict the pace will slow further. They expect US business to grow +9.9% overall, while Canadian business is forecast to be +9.8% higher and business from the rest of the world is forecast to see a +9.5% increase.

Looking ahead to 2014, US construction machinery business is predicted to grow +8.1%, while Canadian business is forecast to grow +7.3% and business from the rest of the world is expected to grow +8.2%.

Uncertainty

AEM president Dennis Slater said uncertainty in both US and international markets was hampering stronger, more sustainable growth.

"2012 is an election year, which does not bode well for meaningful action in Washington; both sides are already in full 'campaign mode,' it seems, and this presents a real danger of a stalling economy. Congress needs to focus on manufacturing policies that create and maintain jobs, not unnecessary and excessive regulatory and tax policy burdens," he said, urging a greater focus on transport infrastructure and federal highway funding.

The AEM said a key positive factor cited in the survey was the continued strength in export demand. However, this was offset by the lack of substantial action on highway funding, which was cited as a negative factor for 2011, with respondents more hopeful for positive results in 2012.