Facts About Industry Sectors

Construction

2007 was a down year for the construction industry, registering an overall decline in terms of annual starts of -8.2%. This was largely attributed to a 22.4% drop in residential construction, which was not offset by growth of 7.3% in non-residential construction, and 4.5% in civil works.
For 2007, construction industry employment fell by just under 200,000 for the year, including 50,000 layoffs in November alone, with layoffs primarily occurring in the residential building sector, whose employment currently stands at 3.15 million.
In terms of construction put-in-place, the U.S. Dept. of Commerce (DOC) expects the final total for 2007 to be $1.35 trillion Ð a decline of 4.8% from 2006. Furthermore, the DOC forecasts the 2008 construction put-in-place will increase optimistically by 1.9%.
According to the Bureau of Labor Statistics, new construction equipment prices rose an est. 2.3% in 2007, which is about 20% higher than 2000.
According to the Association of Equipment Manufacturers (AEM), total construction equipment sales fell 1.9% during 2007, after increasing by 11.2% in 2006. The AEM forecasts equipment sales will increase a mere 2.8% in 2008, due to the housing slump. The AEM also predicts sales will increase by 6.2% for lifting equipment (cranes, aerial lifts, boom trucks, rough terrain forklifts, and telescopic material handlers) compared to 0.6% in 2007; bituminous machinery (such as coal planers, asphalt planers, rollers, etc.) will increase by 1% in 2008 compared to 1.7% in 2007; concrete/aggregate machinery (such as crushers, screeners, etc.) will increase by 5.2% in 2008 compared to 4.7% in 2007. On the other hand, a decline is forecast for earth-moving machinery (such as excavators, loaders, trenchers, off-highway haulers, scrapers, graders, etc.) of -1.7% is 2008 compared to -8.9% in 2007.
For 2007, average used construction equipment prices at auction increased by just over 3% (compared to 9.5% last year), while the total number of units sold declined by only 3% (versus 36% last year). This modest increase in price, combined with the modest reduction in units sold, indicates the market for used construction equipment has plateaued.
Market conditions are expected to weaken through-out 2008.