The construction machinery manufacturing industry expects overall business to remain slow through the end of 2003, but then anticipates 2004 growth in the 3% to 5% range, according to an annual industry forecast of the Association of Equipment Manufacturers (AEM). Sales increases in 2004 are predicted for all major product groups covered in the AEM forecast, with the biggest gain in U.S. business. This year's survey covered 63 whole goods categories and 17 types of attachments and components.
The AEM outlook survey asked manufacturers to rank several factors which would influence future sales and also list their major concerns. The state of the general economy continued to be the overriding factor that will determine if business returns to levels not recorded since 2001.
Machinery manufacturers participating in the annual AEM outlook survey expect construction equipment business in the U.S. to close out 2003 with a 0.4% loss, followed by a 2004 growth of 5.5%. For Canada, construction equipment shipments are predicted to grow 1% by year-end 2003 and record a 3.7% increase in 2004. The forecast for other worldwide business is growth of 0.3% for year-end 2003 followed by a 3.4% gain in 2004.
"We are certainly more optimistic than we have been in the past few years," stated Ron DeFeo, 2003 AEM chairman and chairman/CEO of Terex Corp., Westport, Conn. "We look for general improvement in business conditions to positively impact the construction equipment manufacturing industry."
Rental markets will continue to account for an increasing share of equipment sales. Capital spending by rental firms to replace aging fleets is another factor that will positively affect future machinery business, according to AEM outlook survey participants.
The construction equipment manufacturing industry is global in scope, and the relative strength of the U.S. dollar compared to other currencies remains a concern. World conditions such as continuing Mideast and Iraq tensions also are seen as negatively impacting a fledging recovery. On a positive note is renewed business in the Asian sector, spurred by China's huge demand for equipment.
