Construction equipment manufacturers expect overall industry growth to continue through 2006, but at a somewhat slower pace than 2005, with gains predicted across United States, Canada and other worldwide markets, according to an annual business forecast conducted by the Association of Equipment Manufacturers.

Each year, the Milwaukee-based AEM trade group polls its construction equipment manufacturer members on anticipated industry-wide performance of this multibillion-dollar industry.

In AEM's latest outlook report, construction equipment business in the U.S. is anticipated to close on a strong note for 2005, with increases of 13.9 percent, followed by 2006 growth of 9.3 percent. For Canada, construction machinery sales are predicted to gain 13 percent by year-end 2005 and then increase 8 percent in 2006. The forecast for other worldwide markets is 8.4 percent growth for 2005, followed by 2006 gains of 9 percent.

The state of the overall U.S. economy is the leading factor that will affect growth, say construction machinery manufacturers as they look to 2006, including consumer confidence and interest rate levels, and their effect on housing starts.

The impact of the highway bill on future business is also a major factor cited by manufacturers participating in the survey, since the building and repair of highways, bridges and other public works is a significant component of overall construction activity.

Steel prices and availability have stabilized somewhat, but they still play a significant role in manufacturers' ability to build and sell equipment, say AEM outlook survey participants. Other top issues identified by survey respondents include the strength of the U.S. dollar, underscoring the global scope of the industry, and rental company business, highlighting this major customer segment for many manufacturers.

The AEM annual outlook forecast covers 68 whole machine product types and 18 types of attachments and components, grouped into seven general categories (earthmoving, lifting, light, bituminous, concrete and aggregate, and miscellaneous equipment, plus attachments and components). The complete survey will be available on the AEM Web site, www.aem.org, in the Industry Trends section.