Manufacturers Are on a Roll But the Gravy May Be Slowing
The U.S. economy slowed in the first quarter, slipping to a 3.1% annual rate from its previous 3.8% pace. That may be starting to pull down monthly construction equipment shipments, but they still are way ahead of where they were a year ago, and so are prices.
"Were seeing continued strong demand," says Dennis R. Slagle, president and CEO of Volvo Construction Equipment North America Inc. The units Sweden-based parent company, which also owns Mack Trucks Inc., reports a first-quarter sales jump of 17% compared with a year ago. Its operating margin also jumped from 5.1 to 8.7%. Slagle says suppliers "can start focusing on leveraging off of volume" by pumping more money into research and development. Volvo just unveiled a 70-ton hydraulic excavator, the largest in its line, slated for production in Korea this fall.