Construction equipment shipments from U.S. factories are stable at 25% below their 2006 average. This is the combination of a 40% decline in purchases by U.S. fleets and a 30%-plus rise in equipment exports from a year earlier. As a result, imports of equipment are 17% less than a year ago.

Both equipment purchase and rental prices have weakened, barely rising in the last three months and up only 2% from a year ago. The impact of the recently accelerated plunge in the trade value of the U.S. dollar has yet to be fully reflected in equipment prices. Imports account for more than half of U.S. equipment consumption.

Current Market Dynamics Will Continue in 2008
The current market dynamics will continue in 2008. Ahead, U.S. equipment shipments are expected to rise 7% in 2008. Rising exports to a still rapidly expanding world economy will contribute more than the nominal gain expected in sales to domestic equipment users.

Equipment price increases will be in the +2% to +3% range in 2008. The usual price-weakening impact from spare manufacturing capacity will be more than offset by rising import prices in response to the falling U.S. dollar and an expected 10% to 15% rise in steel prices in the accumulation phase of the steel inventory cycle.

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