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Machinery Exports Bolster U.S. Economy

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Tudor Van Hampton
U.S. machinery exports rose 43% last year as construction starts remained sluggish.
Sany America Inc.
Sany late last month assembled its first excavator in the U.S. at its Peachtree City, Ga., plant.
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While U.S. construction starts slipped slightly last year, machinery exports grew by double-digit percentage points, with shipments to Canada, Australia and Latin America leading the way.

This 43% export increase, reports the Association of Equipment Manufacturers, follows a 28% rise in 2010 after a steep 38% decline in 2009.

"Export sales continue to help U.S. construction equipment manufacturers stay open for business and sustain American jobs, especially with the domestic construction sector still recovering," says Al Cervero, vice president of Milwaukee-based AEM.

The value of machines shipped to other nations was $23.5 billion, says AEM. Top countries taking delivery of U.S. machinery included Canada ($7.2 billion), Australia ($2.7 billion), Mexico ($1.6 billion), Chile ($1.3 billion) and Brazil ($951 million). Others worth noting were China ($903 million), Colombia ($811 million), South Africa ($683 million), Russia ($652 million) and Peru ($572 million).

Meanwhile, U.S. construction starts last year slipped 2% to $421.4 billion, following a slight 1% gain in 2010, according to McGraw-Hill Construction, which, like ENR, is a unit of the McGraw-Hill Cos.

Manufacturers remain bullish about exports in the next decade as the U.S. grows a weakened manufacturing sector. Last month, Caterpillar Inc. announced plans to break ground on a new factory in Athens, Ga., which will replace its small dozer and mini-excavator plant in Japan. At full capacity, which is expected by 2018, about 40% of the $200-million plant's output will be for export, says Peoria, Ill.-based Caterpillar.

Despite the sluggish construction activity in the U.S., Caterpillar and others also expect domestic business to pick up. Late last month, Sany America Inc. assembled its first excavator in a new domestic plant in Peachtree City, Ga. The first China-based equipment producer to assemble in the U.S., Sany built the $60-million plant to overcome political, economic and logistical hurdles associated with building machinery in China for sale in the U.S.

"This equipment is tailored to the demands of American operators, and it's assembled right here in the U.S.," says Jack Tang, president of Sany's U.S. operation.

Caterpillar expects to grow revenue this year by 10% or 20%, to between $68 billion and $72 billion, and spend $4 billion on new capital expenditures, Cat Chairman and CEO Doug Oberhelman told reporters this week in Chile. "At the moment, [economic growth in] Asia is dropping a little, Europe is in recession, and the United States is recovering quite a bit. … We're seeing a little more activity in China this year," Oberhelman told Reuters.



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