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CONEXPO 2014: Trends To Watch

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Photo by Tony Illia for ENR
Anticipating a rise in nonresidential construction and a secular shift toward contractors needing larger machines to rent, crane exhibitors have taken weeks setting up impressive displays for the March 4-8 CONEXPO show in Las Vegas.
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The North American market for heavy equipment is on the upswing as non-residential construction activity, a key driver for these machines, is climbing slowly back up. Look no farther than Las Vegas, where the booms that now dot the skyline are all competing for attention as crane makers get ready for the triennial CONEXPO-CON/AGG exhibition, which opens its doors on March 4 at the Las Vegas Convention Center.

Among the debuts are lifting giants capable of hoisting more than 1,000 tons, standing hundreds of feet tall and featuring advanced technologies that make cranes safer and more efficient to operate. Equipment makers are emphasizing such tougher and smarter machines for the show, which hosts more than 1,000 new products, according to the Association of Equipment Manufacturers (AEM).

With around 2,400 vendors packed into an estimated 2.5 million sq ft of exhibit space, CONEXPO 2014 is larger than ever, says AEM, the Milwaukee-based trade group managing the show. Preregistered attendance has yet to top the show's 2008 record of 144,000, but early feedback from early-bird sign-ups has been encouraging for buyers and sellers wanting to make deals.

"What we've heard is that contractors are looking ahead to a positive 2014," says Megan Tanel, AEM vice president and CONEXPO show manager. "People, for the most part, have been hanging onto their fleets and are looking forward to replacing. I think everyone's been really cautious the past few years."

This year's overall attendance is expected to top 130,000 people, adds Tanel, reflecting a healthier economic outlook than in 2011, when this show was last held for some 120,000 contractors, engineers and other construction professionals. Many look to large construction shows such as CONEXPO to gauge the health of the economy and prospects for future work, which is sure to be a major topic of discussion in the booths. Below are other major trends to watch.

Nonresidential Building To Lead Infrastructure

As more than one million new homes are expected to be built in the U.S. in 2014, this year may finally mark the return of the homebuilding market to normal levels. However, construction activity within some infrastructure sectors has remained lackluster and bumpy during the recovery, forcing contractors to downsize, accept smaller profits, hold on to equipment fleets longer, and look to short-term rentals and leases to fill the gaps. North American rental revenue is projected to reach $41.1 billion in 2014 and $52.3 billion in 2017, reports the American Rental Association.

"This economic recovery is very fragile, and the drive to improve efficiency is essential if we are going to see projects materialize," explains Robert Prieto, senior vice president of Fluor Corp. "Most projects today have marginal economics."

Equipment vendors agree and are rolling out tougher, more powerful machines that reduce downtime and jobsite labor. Sales are "hand-to-mouth but at a really good pace," notes Tim Davison, product manager at Stellar Industries Inc., a service-truck manufacturer and CONEXPO exhibitor. Analysts as investment firm Robert W. Baird & Co. Inc. see non-residential construction, which historically lags residential by roughly 20 months, accelerating in 2014. New projects will drive a 5% to 10% uptick in non-residential activity and a 1% to 3% uptick in public construction, Baird notes. Risks include the effects of the Affordable Care Act on the federal budget and underfunded pension obligations.

"We continue to favor lift equipment over earthmoving equipment in 2014. Within earthmoving equipment, we believe there is potential for a shift in demand toward light equipment," explains Baird in an investor outlook released in January. As more contractors use modular methods, industry experts also see a need for lifting equipment, such as cranes, aerial work platforms and forklifts, to grow larger. CONEXPO hosts an array of supersized machines this year.

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