Sales in the construction equipment manufacturing industry are expected to remain slow through the end of the year, but manufacturers expect 3 to 5 percent growth in 2004, according to an annual industry forecast from the Association of Equipment Manufacturers.
“We are certainly more optimistic than we have been in the past few years,” said Ron DeFeo, 2003 AEM chairman and chief executive of Terex Corp.
The AEM forecast is a survey of machinery manufacturers on how they perceive the effect of the economy on the industry for the rest of 2003 and 2004. AEM asked manufacturers to rank several factors that influence sales, and to list their major concerns, including the impact of interest rates and credit availability on job costs. One of the major events expected to affect the equipment manufacturing industry is the 2004 approval of a TEA-21 reauthorization, which will fund transportation projects and allow states to plan long-term improvements. Another factor expected to help is capital spending by rental firms to replace aging fleets.
This year’s survey covers 63 whole goods categories and 17 types of attachments and components. Out of the individual categories, sales of earthmoving machinery are expected to be the strongest during the 2003-2004 period, with an anticipated 4.9 percent increase for the United States. The second strongest sector is the sales of light equipment, which include breakers, saws, trowels, light towers, generators, pumps, vibrators, compactors, screeds, lasers and mixers. Sales in this segment are expected to increase 1.1 percent by the end of 2003, and increase 5.1 percent for 2004. Other sectors that are supposed to increase by the end of the year include attachments and components, and the sales of miscellaneous equipment. Sales of concrete aggregate equipment, bituminous machinery and lifting machinery are expected to drop by the end of this year, but then all segments are expected to increase during 2004.
To access AEM’s outlook report, click on the link to the right. In addition to the report, the site includes graphs with a breakdown of respondents’ average responses on each equipment category.