Business Roundup: 2016 construction spending, Volvo CE Q4 results, Cat HQ move, JLG closings, Atlas Copco spinoff

Updated Feb 7, 2017

Year-end report: Construction spending dips slightly in December, shows 4.5 percent year-over-year gains in 2016

U.S. construction spending in December was 0.2 percent below the revised November estimate, yet still 4.2 percent over the December 2015 figures, according to numbers released by the U.S. Census Bureau. Also releasing its year-end numbers, the Bureau places the 2016 value of construction at $1.162 trillion, which is 4.5 percent above the $1.112 trillion spent in 2015.

Compared with the November revised estimate of $1.184 trillion, construction spending in December dipped slightly to $1.181 trillion.  Private homebuilding rose 0.5 percent to $466.9 billion in December, compared to the revised November estimate of $464.8 billion. Residential construction was up 5.1 percent for the year, compared with 2015.

On the nonresidential side, spending was essentially flat from November to December, at $430.1 billion for each month. Total nonresidential spending in 2016 increased by 4.1 percent, compared with the previous year. In addition, compared with 2015, total private construction for the year was up 6.4 percent.

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Volvo Construction Equipment Q4 net global sales increase by 20%; 2016 total down 1%

Releasing its fourth quarter results, Volvo Construction Equipment says it ended the year with a global net sales increase of 20 percent to SEK 13,110 million, due to a “favorable product mix, higher sales volumes, lower costs for credit losses in China and reduced operating expenses.”

The announcement was offset, however, by the company’s report that its full year sales decreased by 1 percent to SEK 50,731 million.

“Global demand for construction equipment was largely flat in 2016,” says Martin Weissberg, president of Volvo CE. “However, there were signs of progress in Asia. Volvo shows positive signs of growth in our stronghold segments of excavators, wheel loaders and articulated haulers.”

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Caterpillar plans global headquarters move to Chicago

Caterpillar has announced plans to move its worldwide operations to the Chicago area later this year and will no longer build the Peoria headquarters complex as previously announced.

The company says a “limited group” of support functions and senior executives, adding up to about 300 employees, will be located in Chicago when the new office is fully operational. While the current headquarters building will still to be used, some of the positions at the new site will be relocated from Peoria.

“Caterpillar’s Board of Directors has been discussing the benefits of a more accessible, strategic location for some time,” says Caterpillar CEO Jim Umpleby. “Since 2012, about two-thirds of Caterpillar’s sales and revenues have come from outside the United States. Locating our headquarters closer to a global transportation hub, such as Chicago, means we can meet with our global customers, dealers and employees more easily and frequently.”

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JLG to close manufacturing at Orrville, Ohio plant, shutter two European facilities

JLG Industries, part of the Oshkosh Corporation, plans to shut down the manufacturing lines at its Orrville, Ohio, telehandler plant by Sept. 30 this year, and will move all North American telehandler production to its Pennsylvania sites.

It also plans to close the Maasmechelen, Belgium, manufacturing and pre-delivery inspection (PDI) facility within 18 months, and its Bruntingthorpe, U.K, engineering center once it has conducted negotiations with “employee representatives.”

The company reports engineering services in Orrville will continue. The manufacturing lines closures will hit 525 employees between the Ohio facility and the Belgium site.

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Atlas Copco board proposes spinoff company to focus on mining and civil engineering

Atlas Copco’s board of directors has proposed splitting Atlas Copco Group to create a separate company from its Mining and Rock Excavation Technique Business Area and Construction Tools division with the aim of being dedicated to mining and civil engineering customers.

This new company would include 12,000 employees from these two business units and would have its own board of directors and CEO. Atlas Copco says there would be no change to the existing structure.

Plans are to list the company on the Nasdaq Stockholm stock exchange in mid-2018 if the restructuring is approved in April that year during the Atlas Copco Annual General Meeting.

“With the new company solely dedicated to mining and civil engineering we can serve our customers even better than today,” says Helena Hedblom, Business Area President, Mining and Rock Excavation Technique, who was named to the position Jan. 1.

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