Makers of construction equipment, suddenly facing riskier near-term economic prospects, will stress fuel economy and compliance with tougher environmental standards at the industry’s mammoth Conexpo trade show opening Tuesday in Las Vegas.
Caterpillar will be among the equipment makers at the Conexpo trade show in Las Vegas. The event is expected to focus on energy concerns.
Worries tied to the nuclear emergency in Japan and uprisings in the Mideast have clouded the outlook for an industry that has been recovering rapidly from recession. But those worries, along with persistent weakness in the U.S. housing market, add urgency to the sales pitches stressing energy savings planned for the trade show, which will run through Saturday.
“Fuel efficiency will be a major topic,” says John Patterson, deputy chairman of JCB Group, a maker of backhoe loaders and other equipment based in Staffordshire, England. JCB will display its Ecomax T4 diesel engine, used in a variety of equipment. The company says the engine uses 10% less fuel than the previous model.
Parker Hannifin Corp., based in Cleveland, will tout its RunWise hydraulic equipment, which is designed to reduce trucks’ fuel use by recovering energy from the braking process that is usually wasted in the form of heat.
The U.S. unit of Germany’s Bomag GmbH will display a fuel-saving system that causes the engines of compactors, which are used in applying asphalt and flattening soil, to idle automatically when full power isn’t needed.
Sales of machinery in the U.S. and Europe began rebounding last year from the recession-driven plunge of 2009, and such emerging markets as China, India and Brazil have remained strong amid heavy spending on roads, ports and other infrastructure.
Industry-wide retail sales of earth-moving equipment in the U.S. and Canada rose 18% last year from 2009. Caterpillar Inc., the world’s largest construction-equipment maker, reported Friday that machinery sales by its dealers world-wide in the three months ended Feb. 28 were up 59% from a year earlier.
But U.S. housing starts are still running at less than a quarter of their January 2006 peak, and U.S. commercial construction remains muted. Mr. Patterson says that JCB has coped with the weak building market partly by putting more stress on sales of machines used in agriculture, waste treatment and recycling.
Some analysts believe much of the recent U.S. equipment-sales growth has come from dealers replenishing inventories and replacing banged-up equipment in their rental fleets. “Contractors aren’t running out the door buying new machines when projects are few and far between,” says Charles Yengst, a Connecticut-based equipment-market forecaster. He expects U.S. equipment sales to slow later this year. “I’m really concerned that we’re going to run out of gas,” Mr. Yengst says.
Though it isn’t the most glamorous show in Las Vegas, Conexpo is one of the largest. The five-day gathering, whose roots go back to 1909, is held every three years and includes a vast array of equipment and parts used in construction and road building, from cranes to rock crushers and giant earth-moving machines.
The show’s organizer, the Association of Equipment Manufacturers, expects about 125,000 people to attend, down from 143,000 in 2008. Megan Tanel, a vice president at the association, says the expected attendance is “a big win” given the weakness of the U.S. construction market over the past three years.
About 2,400 exhibitors from 38 countries are expected to show equipment, parts and services at the show, which will cover more than 2.3 million square feet. LiuGong Machinery Corp. of China says it has lined up space near rivals Caterpillar and Komatsu Ltd., and it promises to make “a big impression” with excavators, backhoes and forklifts, among other machines.
Fote Heavy Machinery will display a mobile crusher equipped with a hydraulic power system, which can automatically control the conveyor to unfold and fold