TEXT-S&P reports on global construction equipment manufacturers
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 firstname.lastname@example.org. 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.