Exports of US construction equipment are still in decline according to the latest 1100 Association of Equipment Manufacturers (AEM) market update. The AEM report shows that exports of US-made construction equipment dropped 17.6% for the first three quarters of 2015 compared to January-September 2014, for a total $10.8 billion shipped worldwide.
All world regions experienced declines, led by Africa and South and Central America. The AEM equipment manufacturing trade group cited US Department of Commerce data it uses in global market reports for members.
For the January-September 2015 US construction equipment exports to Canada dropped 15% compared with the same period in 2014 to US$4.4 billion. Sales to South America declined 28% to $1.4 billion, while sales to Europe dropped 11% to $1.4 billion and sales to Asia decreased 10% to $1.4 billion. Meanwhile sales to Central America fell 21% to $1.1 billion, while sales to Australia/Oceania declined 5% to $645 million and sales to Africa decreased 36% to $611 million.
AEM’s Benjamin Duyck, director of market intelligence explained that the third quarter of 2015 marked the 11th consecutive quarter that US construction equipment exports experienced year over year declines. According to AEM’s third quarter North American Construction Equipment Industry Conditions Trends Report initial results, 35% of survey exporters indicated they experienced a decrease in exports while 50.9% of respondents felt the market had remained stable.
Contrary to the second quarter, imports also declined - 5.71% year over year. Declining imports is a bigger signal to the US market, especially now that imports are relatively cheaper under the stronger dollar. In the third quarter AEM industry conditions survey, 42.3% of respondents indicated U.S. demand for equipment was lower this quarter compared with last year while 30.7% felt the market remained stable. For the next 12 months, overall growth is still expected.
While the global environment is still positive for construction and construction equipment, one of the bigger clouds could be the Chinese market. It is the US’s ninth largest export market for construction equipment and it declined 25% year to date. Another cloud is Brazil, which last week announced its economy was going deeper into a recession after three consecutive quarters of contraction in its GDP. While exports to Canada, the largest trading partner for the US, also decreased, by 15% year to date, Statistics Canada recently reported that the economy returned to quarterly growth.
While it is hard to pinpoint the exact cause of the declining exports, some of the possible explanations may be the difficulties in exporting equipment with engines that require low sulphur, strengthening local manufacturing industries and a strong US dollar making US manufacturers less competitive.
The top countries buying US-made construction machinery during the first three quarters of 2015 (by dollar volume) were Canada at $4.4 billion and down 15%, Mexico at $906 million and down 23% and., Australia at $602 million and down 3%. Next came Chile at $388 million and down 11%, Brazil at $347 million and down 39%, Peru at $267 million and down 26%, South Africa at $264 million and down 50% and Belgium at $230 million and down 34%. Meanwhile sales to China stood at $214 million and down 25% while sales to the UAE were $182 million, up 57%.
All world regions experienced declines, led by Africa and South and Central America. The AEM equipment manufacturing trade group cited US Department of Commerce data it uses in global market reports for members.
For the January-September 2015 US construction equipment exports to Canada dropped 15% compared with the same period in 2014 to US$4.4 billion. Sales to South America declined 28% to $1.4 billion, while sales to Europe dropped 11% to $1.4 billion and sales to Asia decreased 10% to $1.4 billion. Meanwhile sales to Central America fell 21% to $1.1 billion, while sales to Australia/Oceania declined 5% to $645 million and sales to Africa decreased 36% to $611 million.
AEM’s Benjamin Duyck, director of market intelligence explained that the third quarter of 2015 marked the 11th consecutive quarter that US construction equipment exports experienced year over year declines. According to AEM’s third quarter North American Construction Equipment Industry Conditions Trends Report initial results, 35% of survey exporters indicated they experienced a decrease in exports while 50.9% of respondents felt the market had remained stable.
Contrary to the second quarter, imports also declined - 5.71% year over year. Declining imports is a bigger signal to the US market, especially now that imports are relatively cheaper under the stronger dollar. In the third quarter AEM industry conditions survey, 42.3% of respondents indicated U.S. demand for equipment was lower this quarter compared with last year while 30.7% felt the market remained stable. For the next 12 months, overall growth is still expected.
While the global environment is still positive for construction and construction equipment, one of the bigger clouds could be the Chinese market. It is the US’s ninth largest export market for construction equipment and it declined 25% year to date. Another cloud is Brazil, which last week announced its economy was going deeper into a recession after three consecutive quarters of contraction in its GDP. While exports to Canada, the largest trading partner for the US, also decreased, by 15% year to date, Statistics Canada recently reported that the economy returned to quarterly growth.
While it is hard to pinpoint the exact cause of the declining exports, some of the possible explanations may be the difficulties in exporting equipment with engines that require low sulphur, strengthening local manufacturing industries and a strong US dollar making US manufacturers less competitive.
The top countries buying US-made construction machinery during the first three quarters of 2015 (by dollar volume) were Canada at $4.4 billion and down 15%, Mexico at $906 million and down 23% and., Australia at $602 million and down 3%. Next came Chile at $388 million and down 11%, Brazil at $347 million and down 39%, Peru at $267 million and down 26%, South Africa at $264 million and down 50% and Belgium at $230 million and down 34%. Meanwhile sales to China stood at $214 million and down 25% while sales to the UAE were $182 million, up 57%.
