US Machinery Exports Suffer 13th Quarter of Decline

Construction machinery

Some interesting statistics have been published that show how US equipment manufacturers are having another difficult year.

2015 was bad enough but 2016 looks like being even worse. At least for exports, that is.

The Association of Equipment Manufacturers (AEM) represents more than 850 US companies that between them make more than 200 product lines in the agriculture, construction, forestry, mining and utility sectors.

AEM’s statistics show that exports of US equipment slumped 25% by value in the first quarter of 2016. This comes on the back of a 19% fall for the year in 2015.

Total first quarter machinery exports from the USA reached $2.7 billion for the three months ending 31st March 2016, compared to $3.6 billion for the first quarter of 2015.

The biggest percentage falls were seen in Africa and South America, to where US exports shrank by nearly 50%. More damaging, however, was the >$400m first-quarter fall in exports to Canada, from more than $1.5 billion  to just $1.1 billion .

Canada is far and away the USA’s biggest export market, accounting for $5.5 billion of machinery shipments in 2015 (and $6.7 billion in 2014) so such a drop is significant to US manufacturing.

US construction machinery manufacturers’ second biggest export market is its southerly neighbour Mexico (until Donald Trump builds his wall). Mexico bought $1.2 billion of US-made machinery in 2015 (and $1.6 billion in 2014).

Cat machinery

The first quarter of 2016 marked the 13th consecutive quarter that US construction machinery exports experienced year-on-year declines. AEM’s director of market intelligence, Benjamin Duyck, attributed the continued downturn to the strength of the US dollar, making US equipment relatively more expensive for overseas buyers.

That may explain some of it, but the fall in oil prices is also a major part of the story. Orders for heavy machinery used in minerals extraction – a big industry in Canada – have dried up, and major projects worldwide have stalled as investors become jittery.

Benjamin Duyck says that the biggest decreases in exports have been in earthmoving equipment. Sales in this segment were down 35 percent in the first quarter of 2016.

US lifting equipment manufacturers, by contrast, actually saw a slight increase in first quarter 2016 exports, thanks to demand for self-propelled aerial work platforms, but this might not last for long. Earthmoving is considered a leading edge indicator in construction machinery because building projects tend to start with ground preparation and end with roof tiles and flooring. Therefore when sales of dozers and excavators fall, lifting equipment manufacturers brace themselves in preparation for what is coming their way.

US exports by Top 10 Countries: 2016 first quarter

The top countries buying the most US-made construction machinery during first quarter 2016 (by dollar volume) were:

  1. Canada – $1.1 billion, down 28 percent
  2. Mexico – $310 million, down .01 percent
  3. Australia – $148 million, down 10 percent
  4. Belgium – $101 million, up 38 percent
  5. Peru – $85 million, down 17 percent
  6. Germany – $74 million, up 58 percent
  7. Chile – $60 million, down 48 percent
  8. China – $49 million, down 31 percent
  9. United Kingdom – $47 million, up 8 percent
  10. South Africa – $40 million, down 65 percent

 The surprisingly high figure for Belgium can be explained by the fact that machines passing through the Port of Antwerp for onward shipment through for the European continent counts as a Belgian sale in this context. US exports to Germany and the United Kingdom were also up. In Germany this was driven by a boost in excavators and wheeled loader exports; in the UK it was self-propelled aerial work platforms that made the biggest contribution to growth.

[Source: All statistics from AEM]

Steve Rhine

About Steve Rhine

Community Manager at MachineryZone USA - All latest construction news on MachineryZone Mag!