The construction equipment manufacturing industry expects continued business declines in the United States through year-end 2008 of 8.6 percent, followed by flat growth in 2009 of 0.04 percent, according to the annual “outlook” survey of the Association of Equipment Manufacturers (AEM). Canada is predicted to fare better, with business stabilizing at minus 1.7 percent for 2008, followed by 2.2 percent growth in 2009. Sales to worldwide markets are anticipated to increase 8.5 percent by year-end 2008 and gain 5.4 percent in 2009.

 
The survey provides a snapshot of construction machinery manufacturers’ predictions for overall year-end 2008 and 2009 business in the U.S., Canada and worldwide. 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 U.S. financial market collapse.

Economic and Industry Trends Affecting Growth

The AEM outlook survey asked respondents to rank the influence of several factors on future construction equipment sales. Not surprisingly, the state of the general economy was cited as a key factor affecting future industry growth. Specifically, the level of housing starts and highway funding will be a major influence on construction equipment business volume. Continued export demand, and the relative strength of the U.S. dollar, will also affect sales, and the price of steel and other commodities continue to be a concern.

Sales Forecasts by Major Product Lines

Earthmoving Equipment: Year-end 2008 business for earthmoving equipment is expected to decrease 15.8 percent for the U.S. and 6.8 percent for Canada, while increasing 6.0 percent in worldwide markets. Business volume in 2009 is anticipated to decline 3.3 percent in the U.S., remain flat (down 0.6 percent) for Canada and gain 4.8 percent worldwide.

The earthmoving segment includes crawler and wheeled excavators; rear dump and articulated haulers; motor graders; backhoe, crawler, wheeled, compact and skid-steer loaders; crawler tractors; trenchers and ditchers; wheeled log skidders; and scrapers.

Lifting Equipment: Sales of lifting equipment are anticipated to decrease 7.4 percent in the U.S. by year-end 2008, remain flat (up 0.9 percent) for Canada, and show gains of 4.2 percent for worldwide markets. Market predictions for 2009 are growth of 2.4 percent in the U.S., gains of 5.6 percent for Canada and increases of 8.2 percent in worldwide markets.       

Lifting equipment includes knuckle and telescopic boom truck cranes; all terrain, hydraulic truck, rough terrain and tower cranes; lattice boom cranes; rough terrain and truck-mounted forklifts; and telescopic handlers.

Bituminous Equipment: For year-end 2008, bituminous equipment sales are anticipated to decrease 8.8 percent in the U.S. and 2.8 percent for Canada. The worldwide market for bituminous equipment is predicted to gain 16.4 percent in 2008. For 2009, bituminous equipment sales are expected to decline 3.3 percent for the U.S., remain flat (down 0.6 percent) for Canada and gain 7.8 percent for worldwide markets.

Bituminous equipment includes asphalt plants, screeds and pavers; cold planers; pneumatic, static and vibratory rollers; soil stabilizers; melter/applicators; slurry pavers; and road wideners.

Concrete and Aggregate Equipment: Sales of concrete and aggregate equipment by year-end 2008 are predicted to decline 8.6 percent for the U.S. and 5.3 percent for Canada, while increasing 20.4 percent for worldwide markets. For 2009, sales are expected to increase 4.6 percent in the U.S., anticipated to grow 2.0 percent for Canada and predicted to gain 3.9 percent for worldwide markets.

Machines in this category include concrete pavers; concrete batch plants; mobile concrete breakers; crushers; screens; feeders; conveyors; washing equipment; classifying tanks; and rock drills.

Light Equipment: Year-end 2008 business for light equipment is expected to decrease 10.7 percent for the U.S., while increasing 1.1 percent for Canada and 5.0 percent for worldwide markets. Light equipment business for 2009 is predicted to decline 1.9 percent for the U.S., increase 3.0 percent for Canada and gain 3.1 percent for worldwide markets.

The light equipment market includes machines such as hydraulic and pneumatic breakers; vibratory plate compactors; concrete screeds, saws, vibrators and trowels; generators; light towers; towable mixers; contractor pumps; power buggies; vibratory walk-behind rollers; air compressors; lasers; and truck-mounted air compressors.

Miscellaneous Equipment: Sales of miscellaneous equipment for year-end 2008 are anticipated to decrease 11.2 percent for the U.S. and 1.6 percent in Canada, while increasing 16.5 percent in worldwide markets. For 2009, U.S. sales are expected to rise 9.5 percent, sales in Canada are predicted to increase 11.1 percent, and worldwide sales are forecast to grow by 9.3 percent.

Equipment in this category includes heavy-duty and light to medium trucks; earth drills (augers); landfill/refuse compactors; side dump, live bottom and flatbed trailers; sewer vacs; environmental grinders; equipment washers; sweepers; and trenchless equipment. 

Attachments and Components: The business volume for attachments and components is predicted to show year-end 2008 gains of 3.3 percent in the U.S., 2.6 percent for Canada and 6.9 percent for worldwide markets. Sales in 2009 are expected to grow by 3.4 percent in the U.S., 2.6 percent for Canada and 5.4 percent for worldwide markets.

The attachments and components category includes buckets; quick couplers; augers; demolition shears; pulverizers/crushers; hydraulic components; rippers/scarifiers; compactors; grapples; blades; rakes; forks; snow blowers; powertrains; engines; asphalt cutters; hooks; bearings; and brake systems.                                                 

AEM Outlook Survey Results

Overall Average Percent Changes Predicted for Unit Sales