Equipment Sales Prompt Positive Outlook

If equipment sales are any indication of the current and future health of the construction industry, the numbers recently supplied by the Association of Equipment Manufacturers (AEM) provide a comforting outlook.

According to AEM, the North American-based trade group representing manufacturers of construction, agricultural, forestry, mining and utility equipment, U.S. equipment sales for 2006 were expected to be 11.2 percent higher than 2005. Wow! Better yet, forecast numbers for 2007 are projecting a 3.9-percent increase over 2006. That's right, a 15.1 percent increase over 2005 sales. Add the increases projected for Canada (12.7 percent in 2006 and 5.0 percent in 2007) and Worldwide (10.9 percent in 2006 and 6.4 percent in 2007) markets, and it's time for another — Wow!

If you just consider the outlook for bituminous equipment, there's plenty to get excited about. The U.S. market is projecting a 9.3-percent increase in 2006 and a 1.9-percent increase in 2007. Canadian equipment sales are projected at an 18.4-percent increase in 2006 and a 5-percent increase in 2007. Worldwide, bituminous equipment sales will increase by 11.1 percent in 2006 and 6 percent in 2007. Bituminous equipment includes asphalt plants, asphalt pavers, cold planers, soil stabilizers; pneumatic, static and vibratory rollers; road wideners, asphalt distributors, chip spreaders; and slurry pavers.

So why is this exciting news for asphalt producers/contractors? Simply put, you guys were busy in 2006 and you expect to be as busy, if not more so, in 2007. Despite the challenges you faced with rising material costs, 2006 was a good year.

The reported increases in equipment sales tell the story. You went out and invested a lot of money in new equipment, either to replace worn out equipment, expand your production and paving operations, or to simply improve the overall efficiency and productivity of your operations.

Asphalt producers/contractors do not make those types of purchasing decisions simply to have a shiny new piece of equipment in their fleet. You buy new equipment to handle the contracts you've been awarded. You buy new equipment to gain the benefits of what new technology has to offer. You buy new equipment to gain a competitive advantage. You buy new equipment to make money.

That's what happened in 2006 and that's what will continue to happen in 2007. If you want to continue winning contracts, execute quality projects in the most efficient manner, maintain a competitive edge in the market, and continue to make money, you're going to invest in equipment.

Equipment manufacturers know that, and that's why they continue to improve the products and services they have to offer. They know if they can provide a product that meets your needs by allowing you to produce a cost-effective quality product for your customers; they've earned your business today and have a chance to earn your business tomorrow.

So continue to invest in the equipment that will help you profitably grow your business, because it looks like 2007 will give you that opportunity.

Greg Udelhofen, Editor

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