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Leonard Heimowitz
(202) 482-0558

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Construction Machinery

Industry Assessment


The U.S. construction equipment industry is comprised of hundreds of firms, from small businesses to some of the world's largest multinational corporations. Construction equipment is used for the construction of residential and nonresidential buildings, for surface or "strip" mining operations, for new power and manufacturing plants, for logging operations, and for adding to or renovating infrastructures such as sewage and water lines, roads, bridges, and tunnels.

Machines built by the industry are usually classified into ten types: backhoes; bulldozers; construction and surface mining rock drill bits; construction tractors and attachments; off-highway trucks; pile-driving equipment; portable crushing, pulverizing, and screening machinery; powered post hole digging machinery; motor graders and paving machinery; and, surface mining machinery. (NAICS 33312)

Industry Overview and Global Competitiveness

Industry Characteristics

The construction equipment industry is a very cyclical one, with high sales growth during boom years and reductions in output during economic slowdowns and downturns. The industry is affected particularly by factors such as housing starts, consumer confidence, and employment. Since residence and business construction is typically debt-financed, and since most of the industry's equipment are "big ticket" items, interest rates and the availability of credit are important factors.

In 2001, the industry's shipments were valued at $14.3 billion, down 17 percent from its 2000 level of $17.1 billion. The industry's decline reflects a worldwide economic slowdown, industry consolidations, and the movement of manufacturing facilities overseas by some of the major manufacturers.

The majority of the over 800 construction equipment manufacturers in the United States are small or medium-sized and employee some 70,000 people. However, the bulk of the industry's sales are dominated by several very large multinational companies. Over recent years, there has been a constant restructuring of the industry. Scores of companies are either being acquired by some of the larger firms who are diversifying their product lines, or going out of business.

Competitiveness in World Markets

The United States is the world's largest producer of construction equipment. The U.S. is recognized worldwide as producers of high quality state-of-the-art products. Historically, the U.S. is a net exporter of construction equipment. In 2001, total U.S. exports were $6.23 billion, compared with imports of $5.9 billion. While both imports and exports of construction equipment have declined in recent years, they steadily increased over the past decade. The recent worldwide economic slowdown has adversely affected international trade in construction machinery. The industry views the slowdown as temporary and expects both imports and exports to continue their upward trend in the near future.

Over recent years, Canada, Australia, Mexico, Brazil, and Chile have been leading markets for U.S. exports of construction equipment. Key sources for U.S. imports have been Japan, Germany, France, Italy, and Korea. Today, China is probably the most important potential market for construction equipment. Many industry professionals refer to China as the "world's largest construction site." Competition for the China market will be fierce. Quality, price, competitive financing, and after-sales-service will continue to be important factors for American companies' ultimate success in China and in the international marketplace.

U.S. and Global Trends

Foreign competition for construction equipment markets is fierce. Since most of the construction equipment is expensive, sales rely heavily on the best financing packages available. Japan, Germany, and other European countries also manufacture high quality construction equipment and compete with U.S. manufacturers–not only in the United States–but all over the world..

In many markets around the world, U.S. manufacturers remain the dominant suppliers of construction equipment. Market share percentages vary from country to country. However, in most instances, U.S. market shares have been declining to Japanese, German, and recently, Korean competition.

Assessment of Industry's Trading Environment

Key Opportunities for Expanding Exports

The key export opportunities for U.S. manufacturers of construction equipment lie in the developing countries like China, Mexico, and Brazil. In Western Europe, U.S. manufacturers are fighting to maintain their market shares, but most of these market are supplied from local plants that are either joint ventures or wholly owned subsidiaries of some of the large U.S. manufacturers. Eastern European and the Newly Independent Central Asian States are also strong potential markets for U.S. construction equipment. However, competition from Western European and Japanese competitors will be extremely fierce.


Prepared by:

Len Heimowitz
Deputy Director, Office of Machinery
(202) 482-0558

This page was last updated on 11-15-03.  If you have questions or comments about this site please click here.

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