U.S. Exports of Equipment Up 34% in 2006

The market for exports of U.S.-made construction machinery closed out 2006 with a gain of more than 34% compared to the previous year, for a total of $13.7 billion worth of equipment sold worldwide, according to the Milwaukee-based Association of Equipment Manufacturers.

The AEM international trade group consolidates U.S. Commerce Department data with other sources into a quarterly export trends report.

Exports to Central America led the way in 2006 with a 40.5% gain in 2006 purchases. The region took delivery of $1.3 billion worth of U.S.-made construction equipment. Construction machinery exports to South America increased almost 17% in 2006, with purchases worth $1.9 billion.

Exports of U.S. construction equipment to Canada improved 22% in 2006 and totaled $5 billion. Construction machinery exports to Africa gained 34% in 2006, with purchases worth $640 million. Australia/Oceania took delivery of $1.4 billion of construction equipment from the U.S. in 2006, an increase of 26%.

The two world regions showing overall declines for U.S. construction machinery exports were Asia and Europe. Exports to Asia dropped 11% in 2006 and totaled $1.5 billion, while U.S. exports of construction equipment to Europe were 12% lower than the previous year, for a total of $1.85 billion.

Construction Material Costs In Lull, AGC Economist Says

Construction cost increases slowed markedly in the last half of 2006, but relief is likely to be short-lived and may have ended already.

By the end of 2007, materials costs could be rising again at a 6 to 8 percent rate, with wages rising at a 5 percent pace, Kenneth Simonson, chief economist of the Alexandria, Va.-based Associated General Contractors of America said recently.

Construction is vulnerable to high price increases because the industry has little ability to avoid using materials that are in strong demand and for which supplies increase irregularly.

Simonson points to greater volatility in petroleum, concrete and metals products, implying that highway and other heavy construction are likely to experience large price jumps again than are building construction segments.

But, he warns, that even building construction is at risk of much higher materials cost increases than the general rate of inflation.

Over the long-term, two factors distinguish construction costs from the costs facing consumers or most other industries.

First, the consumer price index includes large amounts of services and goods for which materials are not a significant share of the costs or for which substitution among materials is possible. Second, every material used in construction must be physically delivered.

Contractors report that fuel surcharges are more common than in the past, Simonson said. When transportation networks are stretched tight, fuel cost increases are likely to be passed along to customers."

In terms of labor, Simonson believes, the industry also may be entering an era of accelerating wage and salary costs. From February 1997 to February 2007, the industry created one out of 10 new jobs in the economy, double the industry's share of overall employment. Construction employment increased by nearly 2 million, or 33 percent, while total nonfarm payroll employment rose barely one-third as fast, or 13 percent.

Demand for skilled craft workers, supervisors, estimators and managers is growing as the volume of nonresidential construction increases. However, low unemployment throughout the economy means there are fewer applicants to choose from while more skilled construction workers are reaching retirement age.

Wisconsin Concrete Design Award Winners Named

The Wisconsin Ready Mixed Concrete Association recently recognized the winners for the 2006 Concrete Design Awards.

The winners can be viewed online at www.wrmca.com.

The awards are a part of a program showcasing best uses of ready-mixed concrete in Wisconsin and Michigan's Upper Peninsula.

The Wisconsin Ready Mixed Concrete Association and the Wisconsin Chapter of ACI International cosponsor the annual award program, now in its 28th year. Award winners were determined by a panel of Wisconsin/UP educators and construction professionals.

The award program recognizes excellence in the ready-mixed concrete industry in the following categories: Agricultural, Commercial, Decorative, Education, Healthcare, and Public, Environmental Management, ICF Commercial, Industrial, Municipal/Building, Parking Lot, Pervious, Residential, ICF Residential, Site Cast Tilt-Up and other projects.