Equipment manufacturers predict market growth.

The construction machinery market is expected to end the year with sales growth followed by more moderate gains in 2005, according to the annual outlook forecast of the Association of Equipment Manufacturers (AEM), Milwaukee, Wis.

Released in October, the outlook forecast is the result of a poll of AEM's manufacturer members about expected sales.

Manufacturers participating in the latest AEM survey expect construction equipment markets to close out 2004 with double-digit gains in the United States with a 16.1 percent increase from 2003 sales. Canada is expected to close the year with a 14.3 percent gain. and an 8.8 percent jump is anticipated for other worldwide markets.

The United States is expected to lead the market growth again in 2005, according to the survey.

Manufacturers predict continued growth in 2005, but they anticipate the gains will be made at a slower rate with an 8.4 percent increase in the United States, a gain of 6.6 percent in Canada and a 7 percent increase in other worldwide markets.

"Optimism is definitely the mood as our industry continues to recover from the business slump of the past few years," says Charles Stamp, AEM chairman and vice president of public affairs worldwide for Deere & Company, Moline, Ill.

In the survey, machinery makers cited a number of factors that affected market growth in 2004, including world demand from China, a comparatively weak U.S. dollar and federal transportation funding. These factors and others, like gas and oil prices, commodity costs (especially steel) and interest rates, will continue to affect the market in 2005, says Stamp.

According to the survey, equipment rentals also continue to be a major determinant of construction machinery market growth.

The annual AEM survey is conducted in the third quarter and outlines manufacturers' estimates of year-end business volume for the current and next year. The 2004-2005 forecast covers 68 machine product types and 16 types of attachments and components, which are grouped into seven broad product segments.

The full report is available on the AEM Web site at www.aem.org/Trends/Econ/PDFs/ Outlook_2004.pdf.