Construction Forecasts

News & Analysis

Construction Equipment Shipments Up Slightly in March

05/11/2011 by Jim Haughey, RCD Chief Economist

The construction equipment sales boom is slowing with shipments about steady for the last three months although manufacturers’ orders are 12% higher than shipments so far this year. The order backlog continues to expand but so does the inventory held by manufacturers. US factory shipments nearly doubled in the last five quarters but sales gains through 2012 are now expected to fall to a single digit annual pace. The turn up in construction activity has begun to replace fleet rebuilding and exports as the dominant market driver. The apparent domestic consumption of construction equipment has almost doubled in the last year. Exports have steadied at a high level since last summer while imports have continued to rise.

The construction equipment price index rose 0.4% in March to 2.6% above a year ago and equipment rental rates reversed their deep February decline. After being nearly steady for two years, the equipment price index increased at a 6.8% annual pace in the last four months. This was partly driven by rising import prices, especially for metals and an uptick in the US general inflation rate. The recent price spurt will quickly slow but will push equipment inflation to near 3% by late 2011 and near 4% by late 2012.

US Equipment Market – May 2011

  Mar 11
Actuals
Feb 11
Actuals
Latest Month (Mar 11)
% Versus
Year
Ago
% Versus
3 Months
Ago
% Versus
Previous
Month
$Millions, seasonally adjusted $US millions
(seasonally adjusted)
US Equipment Manufacturers
US Factory Shipments 3,138 3,111 48.0 7.2 0.9
US Factory Orders 3,422 3,505 36.1 -5.3 -2.4
US Factory Unfilled Orders (month end) 12,736 12,452 34.6 9.7 2.3
US Factory Inventory (month end) 5,900 5,735 27.2 3.3 2.9
US Factory Order Backlog (months) 4.1 4.0 -9.1 2.4 1.4
US Equipment Imports 977 977 92.5 11.8 0.1
US Equipment Exports 1,332 1,391 36.1 -3.6 -4.2
   
US Equipment Consumption 2,636 2,793 85.2 25.4 -5.6
   (shipments - exports + imports +/- inventory change)  
   
Construction Equipment Price Index 195.7 194.9 2.6 1.6 0.4
Construction Equipment Rental Price Index 117.4 114.1 1.7 0.2 2.9

Data Sources: US Department of Commerce and US Department of Labor
Table: Reed Construction Data


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