Supply chain headaches remain for the construction equipment sector says AEM

Despite the economic recovery after the COVID pandemic, headaches remain for manufacturers, according to the latest Economic Impact Report from the Association of Equipment Manufacturers (AEM).
CONEXPOCON/AGG 2023 / March 15, 2023
More workers needed.
More workers needed.

Original equipment manufacturers, OEMs, are struggling with shortages from their suppliers, especially when it comes to processing chips for some of the new smart solution systems being introduced for more efficient machine operation. Delivery and lead times are increasing, said Rod Schrader, AEM chairman, who is also chief executive of Komatsu.

Couple this with a labour shortage felt in most areas of the economy and OEMs are having to be innovative, said Schrader. More shift work and overtime is happening. But instead of OEMs increasing prices once a year, many are inching up their prices three or four times a year.

There must be a revamping of immigration laws and work regulations in the US to ease the shortage of labour, said Kip Eideberg, AEM senior vice president of government and industry. The construction equipment manufacturers must band together to drive the message home to their politicians in Washington.

As the same time, noted Eideberg, the US government should double down on getting better trade deals globally. Around 30% of the sector’s machines are exported, so lower tariffs are needed for maintaining and increasing this figure. Similarly, there needs to be more tax breaks for manufactures to invest more in research and development – essential for US-made and manufactured machines to compete globally.

The AEM report includes the industry’s total and direct contributions to the US economy at the national, state and congressional district levels, as well as economic contributions measured in terms of employment, contribution to GDP, labour income, state and federal tax receipts and more.

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