Sales of batch plants, concrete paving machinery, and related equipment are projected to increase 14% in the U.S. by year-end. Also anticipated are gains of 9.6% for Canada and 9.3% for other worldwide markets. In a survey of member company year-to-date and projected shipments, the Association of Equipment Manufacturers also projects that the total construction equipment business in 2005 will show increases of 13.9% in the U.S., 13% in Canada, and 8.4% worldwide. AEM's latest “outlook” report further notes that in 2006, construction equipment category shipments will collectively increase another 9.3% in the U.S., 8% in Canada and 8.4% for worldwide markets.
“Business volume remains solid but our members do not believe this level will be sustained,” says AEM Chairman Charles Stamp, (Deere & Co). “The housing market is a key driver of our industry's sustained business growth. We continue to enjoy an exceptionally long period of historically low mortgage interest rates.”
The impact of the SAFETEA highway bill on future business is also a major factor cited by manufacturers, since the building and repair of highways, bridges, and other public works are significant components of overall construction activity. “The challenge now is that individual states may not have the ability to match the modest federal increase, which may limit new contracts and slow down business. And, with higher oil and gasoline prices, some are calling for money to be diverted away from highway needs into general taxpayer relief,” Stamp says.
Steel prices and availability have stabilized somewhat, but they still play a significant role in manufacturers' ability to build and sell equipment, AEM outlook survey participants report.