Equipment sales and supply chains are being devastated says AEM

May 1, 2020

The US association of construction and aggregates equipment manufacturers (AEM) says COVID-19 is wiping out demand and disrupting supply chains.

Nine out of 10 U.S. equipment manufacturers say the COVID-19 pandemic has had a very negative impact on the economy, according to a new AEM survey out this week.

At the same time, more than half believe that the virus crisis has had a very negative effect on the industry overall, says AEM.

Meanwhile, eight out of 10 executives say the federal government should prioritize a significant investment in the nation’s infrastructure to help equipment manufacturers weather the crisis and help rebuild the economy.

"The COVID-19 pandemic has had an unprecedented impact on equipment manufacturers and the 2.8 million men and women of our industry,” says Dennis Slater, president of AEM.

"Even before the current crisis, equipment manufacturers were facing challenging times as a result of the protracted trade war with China, the mounting infrastructure crisis, and a decline in commodity prices.

"The COVID-19 pandemic has managed to turn an already dire situation worse."

With the onset of the COVID-19 pandemic, equipment manufacturers, suppliers, and distributors immediately stepped up to keep their employees and their communities safe and healthy and continue to supply the equipment needed to feed people, connect the country, and power homes and hospitals.

In the weeks and months ahead, they will help lead the recovery and the renewal of the American economy.

The survey of presidents, CEOs, and owners of leading equipment manufacturers comes as the Congress and the Trump administration are exploring ways to continue to support businesses and limit the damage to the U.S. economy.

Slater continued: "While quick bipartisan action in Congress, including the creation of the Paycheck Protection Program, has helped many equipment manufacturers to date, this survey makes it clear that our member companies need continued support to keep the lights on and workers on the job.

"The vast majority of them want Congress to prioritise infrastructure investment to help support equipment manufacturers and rebuild the economy.”

The survey was conducted between April 16 and April 27, 2020. The 105 respondents weighed in on the effects of the COVID-19 pandemic on the economy, the industry, their companies, supply chain and manufacturing operations, their financial expectations, as well as the challenges they face and specific ways the federal government can keep equipment building healthy and ensure the nation’s economic resilience.

The survey’s key findings include:

Nine out of 10 executives surveyed said that the impact of the COVID-19 pandemic on the overall economy is very negative. Furthermore, more than half said that the effect on the equipment industry is equally bad.

Seven out of 10 executives surveyed have experienced a moderately negative impact on their supply chain, while a quarter said the impact had been very negative.

Four out of 10 executives surveyed expect the outlook for the next 30 days to get worse and said they plan to lower their financial forecast for the same period by more than 30 per cent. The outlook for the rest of the year is better, but six out of 10 said they still plan to reduce their financial forecast by up to 30 per cent.

Nine out of 10 executives surveyed cited a decline in demand for equipment as the primary impact of the COVID-19 pandemic on their business.

Executives surveyed pointed to the financial impact on their business, the continued health and well-being of their employees, and cancelled or delayed orders as the most significant challenges they face.

Eight out of 10 executives surveyed said they would like to see a significant investment in infrastructure to help keep equipment manufacturers in business during the crisis and set the stage for economic recovery.

The detailed findings are available in a memo prepared by AEM’s Market Intelligence Team.

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