TEXT-S&P reports on global construction equipment manufacturers

Thu Sep 20, 2012 10:12am EDT

Sept 20 - After a fairly steady rebound for two years following the deep
trough of 2009, construction equipment manufacturers are facing a mixed picture
by region, Standard & Poor's Ratings Services said in a report published
yesterday on RatingsDirect titled, "Global Construction Equipment Manufacturers
Face Weakness In China And Risks Worldwide." 

"Our baseline economic estimates call for the global economy to continue its 
slow recovery in 2013, which should support modest growth in demand for the 
construction equipment industry next year, but significant risks persist," 
said Standard & Poor's credit analyst Dan Picciotto. The economy remains 
fragile, with the potential for a sovereign crisis in Europe, further slowing 
of GDP growth in emerging markets (particularly China), and risks associated 
with the looming "fiscal cliff" in the U.S. at the end of 2012. Any of these 
factors could derail economic growth and general business confidence, which 
could result in skittishness about orders for durable goods, including 
construction equipment.

The construction equipment industry is feeling the pinch in some key markets. 
Demand has fallen significantly in China, the world's biggest equipment 
market, which has hurt rated companies that operate there to different degrees 
depending on their geographic footprints. Moreover, we think a further Chinese 
slowdown would eventually hurt business confidence and commodity prices 
worldwide. We think demand in broader Europe will be about flat this year but 
still well below its prior peaks in 2007. One bright spot has been the 
relatively good performance of the equipment market in North America, which is 
still recovering from a steep decline in demand that occurred in 2009. 


The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to research_request@standardandpoors.com. Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at www.standardandpoors.com.
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