U.S. equipment exports continue decline
By Andrew Macklin
September 23, 2015 – Canada remains strongly entrenched as the number one importer of U.S. construction equipment in the wake of slowing demand around the world.
Canada purchased $2.11 billion more U.S.-made construction equipment that any other region during the first half of 2015 for a total of $3.1 billion. The next closest region, South America, purchased just short of $1 billion worth of equipment over the same timespan.
Overall, exports of U.S.-made construction equipment declined 17 percent for the first half of 2015 compared to the first half of 2014, with a total $7.4 billion shipped to global markets.
All world regions experienced declines, led by Africa, according to the Association of Equipment Manufacturers (AEM). The AEM equipment manufacturing trade group cited U.S. Department of Commerce data it uses in global market reports for members.
Exports by World Region
January-June 2015 U.S. construction equipment exports by major world regions compared to January-June 2014:
Canada dropped 12 percent, for a total $3.1 billion
South America declined 23 percent, for a total $990 million
Asia decreased 11 percent, for a total $923 million
Europe dropped 14 percent, for a total $878 million
Central America fell 21 percent, for a total $748 million
Australia/Oceania declined 10 percent to $417 million
Africa decreased 44 percent to $385 million
AEM Market Analysis Overview
AEM’s Benjamin Duyck, director of market intelligence, provides some insights:
The second quarter of 2015 marked the 10th consecutive quarter that U.S. construction equipment exports experienced year over year declines and the 7th consecutive quarter that imports rose. While exports decreased for every major region, the only equipment category we noticed some export growth in were generator sets.
While the U.S. market remains stable overall (there are some areas affected by the lower oil prices), the U.S. trade balance for our industry continues to slump. It is hard to pinpoint the exact cause of this situation, as there are many issues at play here.
First of all, a stronger U.S. dollar is making U.S. manufacturers less competitive. In September 2015, the Broad Weighted Trade Index for the US Dollar, provided to us by the Board of Governors of the Federal Reserve, had grown 18.2 percent compared to January 2014 and 21.5 percent compared to January 2013.
A second issue is the global deterioration of demand due to cyclical and structural issues. As investment is flowing from the emerging markets back to the developed western nations, demand for construction equipment travels with it. While not all emerging markets are hit evenly, we can expect the current Chinese downturn to have effect on our markets also. Naturally, shifts in investments allow for growth elsewhere.
Exports by Top 10 Countries
The top countries buying the most U.S.-made construction machinery during the first half of 2015 (by dollar volume) were:
Canada – $3.1 billion, down 12 percent
Mexico – $602 million, down 22 percent
Australia – $387 million, down 9 percent
Chile – $273 million, down 9 percent
Brazil – $268 million, down 25 percent
South Africa – $206 million, down 48 percent
Peru – $192 million, down 31 percent
Belgium – $147 million, down 30 percent
China – $140 million, down 26 percent
Saudi Arabia – $124 million, down 40 percent