Manufacturers Predict a 12.7% Uptick in U.S. Business

AEM construction equipment outlook: Manufacturers predict modest upticks in business through 2013.

In the just-released construction equipment "business outlook" survey of the Association of Equipment Manufacturers (AEM):

  • Construction machinery manufacturers predict overall business in the United States to close out 2010 with 6.4% growth, then gain 12.7% in 2011 and 14.8% in 2012, followed by 2013 growth of 13.0%.
  • Canadian business overall is expected to be 8.2% higher in 2010 than the previous year, and record gains of 12.0% in 2011, 14.8% in 2012 and 12.7% in 2013.
  • Industry business to the rest of the world is anticipated to be strongest in 2010 - up by 14.7% – and then grow 11.8% in 2011, 12.5% in 2012 and 11.2% in 2013.

"While this rebound is welcome, you have to remember our industry was down 30 to 50% in the recession, so there is a long way to go. Although business is improving, it will take years to recover the sales losses of 2008-2009," stated AEM President Dennis Slater.

"This hopeful outlook will be difficult to achieve without action now on transportation infrastructure legislation and export-promotion policies. Infrastructure investment and export agreements are proven ways to create and maintain jobs for U.S. workers, for a sustainable recovery and meaningful uptick in equipment demand," Slater said.

AEM is the North American-based international trade group representing the off-road equipment manufacturing industry. Each business-activity forecast is the average of responses from manufacturers in each product line, predicting industry-wide expectations rather than individual company performance, and unit sales rather than company profitability. Click here for full survey results – online at in the market information section.

The survey asked respondents to rank how several factors would influence sales. Not surprisingly, a key impediment to growth in the construction equipment industry is the stagnant housing market. The general economy, including credit availability, also continues to be a major factor, as is highway funding. The brightest spot is increased export demand.

"The housing market is still very weak, stimulus-funded projects are nearing an end, and state and local budgets continue to shrink. Unemployment in the manufacturing sector remains stubbornly high. In construction, unemployment is still about double the national average; for example, construction unemployment was 18.8% for November 2010," Slated noted.

"Congress and the Administration need to put bipartisan differences aside and finally pass a long-term federal transportation funding bill. Repairing the infrastructure will improve U.S. competitiveness globally by providing a more efficient, safer and reliable system to move U.S. goods to market," Slater said.

"Export sales have helped many U.S. manufacturers keep their doors open, and thus able to provide American jobs and support American communities. Eliminating trade barriers that prevent American manufacturers from selling their products in new markets is vital for a healthy and growing economy," stated Slater.

"The recent U.S.-Korea export-promotion agreement is an encouraging sign, and we urge Congress to take swift action to enact this policy as well as pass the export-promotion agreements still pending with Colombia and Panama," he added.

Slater summarized: "The Administration and Congress need to truly focus on national policies that keep manufacturing strong, policies that create the certainty manufacturers need to invest and hire. A robust American manufacturing sector is necessary so our economy can compete with other countries and our equipment manufacturers are able to prosper and grow right here in the United States. Until these things are done, America's economy will suffer and our competitive position in the world will be threatened."

Slater noted that AEM is advancing job-creation messages through its "I Make America" campaign and in cooperative efforts with allied industry and business groups, including the "Start Us Up USA" campaign.