Heavy Equipment Guide Logo

Supply chain issues still remain, but hope remains high for recovery, says AEM survey

Workers work on a busy construction site
Let's look at some of the driving forces and key points from AEM's Q1 webinar regarding what equipment manufacturers in the construction industry will be facing. Pixabay

The equipment manufacturing industry is still recovering from the impacts of the COVID-19 pandemic nearly three years after its onset.

With that in mind, AEM regularly surveys its members regarding their thoughts on various economic trends and how they are affecting business efforts, both within the U.S. and abroad. In the latest survey, most respondents stated that they are still experiencing supply chain issues, with many saying that conditions continue to worsen.

"Nearly all respondents still face supply chain issues with more than half experiencing continuously worsening supply chain conditions," says Kip Eideberg, senior vice president of government and industry relations. "The two driving factors that we hear are the current supply chain disruptions and the workforce shortages."

The challenges of high-interest rates and energy and material prices have plagued the construction industry, but there is hope for these issues to eventually be resolved.

Let's look at some of the driving forces and key points from AEM's Q1 webinar regarding what equipment manufacturers in the construction industry will be facing for the remainder of this year. Danny Richards, lead economist, construction, at Global Data presented the data.

  • Global construction output growth slowed in 2022 and will remain sluggish in 2023. Interest rates remain high and could rise further in the first half of this year before central banks bring to an end this tightening cycle, assuming of course that inflation starts to fall. Energy and construction material prices also remain high, although some fell from the peaks of the second quarter of last year.
  • Investment in infrastructure, as well as in energy and utilities, will be driving forces for growth. Investment in infrastructure will continue to be a driving force for growth, especially as the Investment Infrastructure and Jobs Act in the U.S. gathers momentum. Energy and utilities will also provide a boost to overall construction activity, with renewable energy projects remaining a key investment focus.
  • The industry is optimistic as it tracks $3.6 billion in projects across multiple sectors. Despite a relatively weak short-term outlook for construction output, there is still a sizeable pipeline of opportunities on the horizon over the next several years.
  • The decline in construction output is expected to slow in 2023. The U.S. was among the few markets to register positive growth in 2020 and 2021. However, driven largely by intense inflationary pressure and a slowing residential sector, output dropped sharply in 2022. Despite the deeper-than-expected decline in the residential market remaining a risk to overall growth, there has been an improvement in non-residential sectors. 

The data shows AEM CE indexes are in line with the average indexes. And, despite supply chain and workforce retention issues, many equipment manufacturers are hopeful for eventual resolutions to these ongoing issues in the industry.

Company info

6737 West Washington Street, Suite 2400
Milwaukee, WI
US, 53214-5647


Read more

Related Articles