Construction equipment rolls up trade gains, but with a touch of the brakes

Last month’s searches of our US import database were dominated by quests for bulldozers, excavators, backhoes and their manufacturers. Of the top dozen most sought company names, eight are makers of heavy equipment.

The list (ranked by search frequency): Komatsu America, Leibherr Construction Equipment, Caterpillar Inc., Doosan Infracore Construction Equipment, Terex Construction, JCB, Kobelco Construction Machinery, and CNH. (Kobelco and CNH redefined their previous affiliation in December.)

The heightened interest in construction equipment led us to take a look at the trade data for this bellwether sector.

Construction equipment exports have been one of the US economy’s brightest spots – and 2012 saw a 13% increase over 2011 in the value of overseas shipments. However, the Association of Equipment Manufacturers points out that this gain is much smaller than 2011’s 43% growth, or 2010’s 28% recovery following 2009’s 38% drop.

The trade data also shows imports on the rise, and at faster clip.

A closer look at our bill of lading data so far this year (through March 11) suggests imports are driven by related-party trade – that is, trade by US companies with their subsidiaries abroad and trade by US subsidiaries with their foreign parents.

Here are this year’s top consignees and top shippers of bulldozers, excavators and graders (the equipment covered by HS 8429) by volume of maritime shipments:

So Caterpillar, a leading US exporter, is also one of the construction equipment sector’s top importers – of the output of its overseas production facilities.

According to US Census Bureau statistics, related-party trade accounted for about 48% of 2011 consumption imports and 29% of exports by value in 2011. By comparison, related-party trade accounted for 68% of imports and 23% of exports in 2011 in NAICS code 333120 (construction machinery).

Be prepared for heavier brakes on the sector’s trade in 2013. US leader, Caterpillar, is forecasting modest growth while warning that the outlook could worsen in the second half.

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