Equipment manufacturers still face pandemic-related challenges

An excavator buckets drops dirt
File photo.

Equipment manufacturers continue to face challenges created by the COVID-19 pandemic nearly three years after its onset, according to the Association of Equipment Manufacturers (AEM).

AEM regularly surveys its members regarding their thoughts on various economic trends and how they affect their efforts to do business. In the latest survey, most respondents stated they continue to experience supply chain issues, with many saying that conditions continue to worsen.

“Nearly all respondents still face supply chain issues with more than half experiencing continuously worsening supply chain conditions,” said Kip Eideberg, Senior Vice President of Government and Industry Relations at AEM.

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“The two driving factors that we hear are the current supply chain disruptions and the workforce shortages.”

As well, high interest rates and energy and material prices have plagued the construction industry, but hope is on the horizon for these issues to eventually be resolved.

During AEM’s first quarter webinar, Danny Richards, lead economist, construction, at Global Data, outlined some of the driving forces behind the ongoing issues.

Global construction output

Construction growth slowed in 2022 and is expected to remain sluggish in 2023. Interest rates will remain high and could rise further in the first half of this year. Energy and construction material prices also remain high, although some have fallen from the peaks of the second quarter of 2022.

Infrastructure investment

Investment in infrastructure, energy and utilities will be driving forces for growth.Investment in infrastructure will continue to grow especially as the Investment Infrastructure and Jobs Act in the United States gathers momentum. Energy and utilities will also provide a boost to overall construction activity, with renewable energy projects remaining a key investment focus.

The decline in construction output is expected to slow in 2023. The United States was one of the few markets to register growth in 2020 and 2021. However, with intense inflationary pressure and a slowing residential sector, output dropped sharply in 2022. Despite the decline in the residential market remaining a risk to overall growth, there has been an improvement in non-residential sectors. 


The data shows AEM CE indexes are in line with the average indexes. Despite supply chain and workforce retention issues, many equipment manufacturers are hopeful for eventual resolutions to these ongoing issues plaguing the industry.