Construction Forecasts

News & Analysis

Construction Equipment Shipments Up Slightly in June: Orders and Imports Jump

08/15/2011 by Jim Haughey, RCD Chief Economist

Construction equipment shipments from US factories continue to expand but the growth pace slowed during the spring to a 7% annual pace from about a 50% annual pace in the previous six quarters. Manufacturers appear to have over-estimated sales because their inventories have risen relative to sales, pushing up their inventory/sales ratio from about the target level to slightly high. Orders expanded 7% faster than shipments year to date so the manufacturers’ backlog is up 16% from a year ago. This moved the backlog from nervously low to about normal but still one-third lower than backlogs during booming sales periods. The improved market position of manufacturers has permitted more aggressive pricing. Prices are rising at a 5% plus annual rate so far in 2011.

The mix of equipment shipments will change through the end of 2012. Stalled expansion in the heavy construction market due to constraints on public funding will slightly lower the share of earthmoving and paving equipment. The expected modest expansion of the commercial building and housing markets will slightly raise the share of lifting equipment and smaller equipment for small sites.

The Reed Construction Data outlook is for equipment shipments to increase 10% by the end of 2012 with equipment prices rising by at least 5%.

US Equipment Market – August 2011

  Jun 11
Actuals
May 11
Actuals
Latest Month (Jun 11)
% Versus
Year
Ago
% Versus
3 Months
Ago
% Versus
Previous
Month
$Millions, seasonally adjusted $US millions
(seasonally adjusted)
US Equipment Manufacturers
US Factory Shipments 3,617 3,549 27.7 2.9 1.9
US Factory Orders 3,964 3,749 42.3 23.1 5.7
US Factory Unfilled Orders (month end) 9,699 9,352 48.1 9.7 3.7
US Factory Inventory (month end) 5,431 5,231 27.8 7.5 3.8
US Factory Order Backlog (months) 2.7 2.6 16 6.6 1.8
US Equipment Imports 1,276 1,109 58.4 7.9 15.1
US Equipment Exports 1,793 1,710 47.6 -1.4 4.9
   
US Equipment Consumption 2,900 2,787 27.7 5.7 4.1
   (shipments - exports + imports +/- inventory change)  
   
Construction Equipment Price Index 197 196.1 3.1 0.7 0.5
Construction Equipment Rental Price Index 112.3 114 1.8 -4.3 -1.5

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


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