Posted on July - 12 - 2011
Construction Equipment Shipments Up Slightly in March
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.
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