Construction Equipment Market Outlook: Challenges Persist, But Long-Term Hopes Remain High

Share:

3/13/2023

Construction Equipment Market OutlookThe equipment manufacturing industry is still recovering from the impacts of the COVID-19 pandemic nearly three years after its onset.

With that fact firmly in mind, AEM regularly surveys its members regarding their thoughts on various economic trends and how they are affecting their efforts to do business, both within the United States and abroad. In the latest survey, most respondents stated that they are still experiencing supply chain issues, with many saying that conditions continue to worsen.

“Nearly all respondents still face supply chain issues with more than half experiencing continuously worsening supply chain conditions,” said Kip Eideberg, Senior Vice President Government and Industry Relations at AEM during the association’s recently held quarterly Equipment Market Outlook Webinar. “The two driving factors that we hear are the current supply chain disruptions and the workforce shortages.”

The information obtained through the association's surveys is just some of what is detailed in AEM's Business Intelligence Dashboard and then later summarized in AEM’s quarterly Equipment Market Outlook Webinars.

Want to know more about what’s on the horizon for equipment manufacturers and the ag industry they serve? If you’re an AEM member, be sure to attend the upcoming Q2 Equipment Market Outlook Webinar, slated for May 4 from 12 p.m. to 1:15 p.m. Register now.

The ongoing challenges of high interest rates, as well as energy and material prices, have plagued the construction industry, but hope is on the horizon for these issues, as well as others, to eventually be resolved. So, with that in mind, let’s look at some of the driving forces and key points from AEM’s Q1 webinar regarding what equipment manufacturers in the construction industry will be facing for the remainder of this year, according to presenter Danny Richards, lead economist, construction, at Global Data. 

  • Global construction output growth slowed in 2022 and is to remain sluggish in 2023. Interest rates remain high and could rise further in the first half of this year before central banks bring to an end this tightening cycle, assuming of course that inflation starts to fall. Energy and construction material prices also remain high, although some have fallen from the peaks of the second quarter of last year.
  • Investment in infrastructure, as well as in energy and utilities, will be driving forces for growth. Investment in infrastructure will continue to be a driving force for growth, especially as the Investment Infrastructure and Jobs Act in the U.S. gathers momentum. Energy and utilities will also provide a boost to overall construction activity, with renewable energy projects remaining a key investment focus.
  • The industry is optimistic as it tracks projects across multiple sectors. Despite a relatively weak short-term outlook for construction output, there is still a sizeable pipeline of opportunities on the horizon over the next several years.
  • The decline in construction output is expected to slow in 2023. The U.S. was one of the few markets to register positive growth in 2020 and 2021. However, driven largely by intense inflationary pressure and a slowing residential sector, output dropped sharply in 2022. Despite the deeper-than-expected decline in the residential market remaining a risk to overall growth, there has been an improvement in non-residential sectors. 

The data shows AEM CE indexes are in line with the average indexes. And, despite supply chain and workforce retention issues, many equipment manufacturers are hopeful for eventual resolutions to these ongoing issues plaguing the industry.

Learn More: Contact Your Account Success Advisor

In addition to its quarterly Equipment Market Outlook Webinars, AEM continues to offer a wide range of other market data products, including the AEM Business Intelligence Dashboard, reports, whitepapers and public market intelligence highlights. To learn more, contact your Account Success Advisor.

For more AEM news and updates, subscribe to the AEM Industry Advisor.    

AEM Updates, Construction, Mining & Utility

For more AEM news and updates, subscribe to the AEM Industry Advisor.

Related Articles

So Long (For Now): The AEM Manufacturing 2025 Texas Tour Comes to a Close

They say all good things come to an end…After spending the entire month of August engaging with AEM members throughout Texas, the AEM Manufacturing Express closed out its tour...

Join AEM’s Upcoming Member Education Webinar: Carbon Border Adjustment Mechanism, Overview & Best Practices

AEM is pleased to offer its members insights on the European Union's Carbon Border Adjustment Mechanism (CBAM), and how to navigate the regulation, during its upcoming Member...

AEM Welcomes 4 New Members in August

All AEM members work together through the association to build momentum for the equipment manufacturing industry, as well as the ag and construction markets it serves.  AEM...

CONEXPO-CON/AGG is Coming: Top Tips and Takeaways From the 2025 Exhibitor Meeting

By Gina McCarthy, AEM Marketing Communications Director—Attending my first CONEXPO-CON/AGG Exhibitor Meeting last week felt like stepping into the beating heart of North America...

Infrastructure Funding in the Northeast Opens Opportunities for Equipment Manufacturers

Following historical federal investment in infrastructure development, including theInfrastructure Investment and Jobs Act (IIJA), demand for infrastructure projects in the...

View all AEM Updates