Equipment Manufacturing Declined 43 Percent

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U.S. construction equipment

U.S. construction equipment manufacturers suffered an estimated 43 percent decline in business in 2009, according to a survey conducted by the industry trade group Association of Equipment Manufacturers.

Respondents to the survey of U.S.-based companies on average expected a 5 percent increase in business in 2010, followed by gains of 15 percent in 2011 and 14 percent in 2012, not enough to erase severe losses of both business and jobs. The outlook for the export-driven industry is only a little less dismal outside U.S. borders.

For Canada, 2009 business decreased an estimated 34-percent overall. Respondents expected a 2010 increase of 7 percent, a 14 percent increase in 2011 and an 11percent increase in 2012.

Industry business to the rest of the world was expected to close out 2009 with losses of 34 percent, followed by a 2010 gain of 7 percent and growth of 13 percent in 2011 and again in 2012, according to the AEM survey.

“Even with a modest rebound in the next few years, the construction equipment industry will still be down by double digits, and there will still be double-digit industry unemployment,” said AEM President Dennis Slater. “This is not surprising given the continued instability of the housing market and no long-term commitment to America’s roads, rail, airports, water distribution and ports to move people and goods efficiently and safely, and to compete effectively in the global marketplace.”

Survey respondents said the state of the overall economy, including credit availability, interest rates and consumer confidence levels will influence construction equipment sales in the coming years. Housing starts and highway funding levels will also play a major role in any business rebound. Other major factors are the strength of the U.S. dollar and international business, since the industry is export-intensive, said AEM.

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.

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