The construction machinery manufacturing industry is anticipating closing out 2004 with robust business growth, followed by continued but more moderate gains in 2005, according to the just-released annual "outlook" forecast of the Association of Equipment Manufacturers (AEM). Gains are expected to be strongest for U.S. markets in both 2004 and 2005.
Each year the North American-based AEM trade group polls its manufacturer members about expected sales of the construction-related machines which build and maintain the world's roads, bridges, dams, houses, offices, schools and other public and private infrastructure.
Manufacturers participating in the latest AEM outlook survey expect construction equipment markets to close out 2004 with double-digit gains in the U.S. (16.1%) and Canada (14.3%) and an increase of 8.8% in other worldwide business.
For 2005, market growth is predicted to continue but at a slower pace: an 8.4% increase in the U.S., a gain of 6.6% for Canada and a 7% jump in other worldwide markets.
"Optimism is definitely the mood as our industry continues to recover from the business slump of the past few years," stated AEM Chairman Charles Stamp, vice president of Public Affairs Worldwide for Deere & Co., Moline, Ill.
Machinery makers cited commodity costs, most notably steel prices and availability, as a major determinant of 2005 business growth. "When the U.S. government lifted steel import tariffs late in 2003, industry experts expected prices would stabilize and perhaps fall. But other factors affected the marketplace in 2004," explained Stamp. "These included world demand from China, a weak U.S. dollar, shortages of scrap steel, rising costs of other raw materials and higher logistics costs," he added. "In addition, increased oil and gas prices will also affect our cost of doing business."
Continued federal transportation funding is extremely important for every machinery manufacturer and was a major factor noted in the AEM outlook survey.
To access the complete outlook report, go to www.aem.org (Industry Trends).
