The Association of Equipment Manufacturers (AEM) forecasts the overall US and Canadian construction equipment manufacturing business to be flat through to the end of 2007, but a rebound is possible next year.

In its latest outlook survey, AEM predicts the overall construction equipment demand by end of 2007 will decline 1.9% in the US and remain flat in Canada at -0.1%. This contrasts strongly with worldwide business which is expected to grow 9.9%.

The market will pick up in 2008 by 2.8% in the US, 2.9% for Canada and 8% worldwide.

The survey asked respondents to rank the influence of several factors on future sales. The housing slump, general economy, interest rates and credit availability were key factors. Adequate transportation funding and rental company demand were also expected to have a major impact on business.

As construction machinery business is export-intensive, the strength of the US dollar against other currencies is also expected to affect business growth, according to the survey.

Machinery makers also expressed concern over commodity shortages and prices, including steel and energy.

AEM president Dennis Slater says the overall slowdown in 2007 follows "some very good years" for the industry.

"The residential housing slump in the US has sent ripples across the entire economy, not only the construction industry.

"However, growth in non-residential construction continues to offset losses in the housing market."

Slater adds that the continued global demand for construction machinery is balancing the slow-down in domestic business.

"Economic signals are mixed, but there is guarded optimism that our economy will remain resilient and not descend into recession."

Lifting equipment used in the construction sector includes rough-terrain and truck-mounted forklifts and telescopic handlers.