Location, Location, Location

An old real estate mantra states that there are three things to remember when valuing a property: “location, location, location.” A good location typically translates into higher monetary value. This same mantra currently applies to OEMs, fabrication shops, metal service centers, contractors and others doing business in the booming U.S. construction industry: suppliers of heavy equipment, assemblies, parts and services used in construction projects are located in a very good position to make more money – per the latest report from U.S. Commerce Department, domestic construction spending increased 4.5 percent in May to an all-time high of $1.31 trillion on the back of a sturdy increase in investments in private as well as public construction projects. Public construction rose to $304.1 billion, its highest level since October 2010, while state and local construction projects rose to $282.1 billion, their biggest increase since 2009.¹

Furthermore, the Atlanta Federal Reserve stated on July 2 that it expects the U.S. economy to grow at an annualized pace of 3.8 percent in the second quarter, compared with two percent in the first quarter. Since state and local construction constitutes about 90 percent of total government spending on construction, many economists believe that construction spending will propel this overall economic growth even as interest rates remain high.¹ This strong business climate lines up with the $21 billion spending bill passed in March by Congress for infrastructure construction that includes $8.7 billion for highways, roads and bridges; $1 billion for discretionary airport improvements in small and rural airports; $1 billion in critical transportation projects identified by state and local communities, with one-third of that funding work in rural communities; and rural broadband expansion projects of $625 million.² In other words, the U.S. construction market is a great location to be in for metalworking business.

This historically high construction output in the U.S. market places North America alongside China as the two primary locations of global demand for construction business. This new project demand, combined with a need to renew an aging fleet of machinery, has driven 25 percent growth over the past two years in the $88 billion global construction equipment market that includes articulated dump trucks, asphalt finishers, backhoe loaders, crawler dozers, crawler excavators, crawler loaders, mini excavators, motor graders, rigid dump trucks, rough terrain lift trucks (masted and telescopic handlers), skid-steer loaders, wheeled excavators and wheeled loaders. Global sales of this equipment rose 27 percent in the last year alone to 894,000 units – the highest the market has seen since 2012.³ This global strength was recently highlighted on July 31 when Caterpillar Inc. (Peoria, IL) – the world’s largest construction equipment manufacturer – raised their profit outlook and reported “higher prices and strong machinery sales in a buoyant global economy.” ⁴

“Over the coming years, expect moderate but sustained growth in construction equipment demand around the globe to take sales to more than one million units by 2022,” says Chris Sleight, the managing director of Off-Highway Research (London, England). He forecasts that over 26 percent of those sales – one of every four pieces of machinery – will be in the North American market driven by the U.S.³ That’s great news for OEMs that build heavy equipment for construction work.

References

1. “U.S. Construction Industry Remains Upbeat,” Zachs Investment Research, July 6, 2018. Retrieved from
   www.www.zacks.com/stock/news/310490/us-construction-industry-remains-upbeat-4-top-picks.
2. “Congress Passes Spending Bill with $21 Billion for Infrastructure, Increased Leverage for BDCs,” Hazel Bradford, Pensions & Investments, Crain Communications Inc., March 22, 2018. Retrieved from www.pionline.com/article/20180322/online/180329940/congress-passes-spending-bill-with-21-billion-for-infrastructure-increased-leverage-for-bdcs.
3. “Sustained Growth in Global Construction Equipment Markets,” Chris Sleight, Off-Highway Research, KHL Media Limited, April 23, 2018, www.offhighway.co.uk.
4. “Caterpillar Pushes Forecast Higher,” Austin Hufford, The Wall Street Journal, July 31, 2018, www.wsj.com.

That’s also a lot of construction work, which translates into solid business for other OEMs, fabrication shops, metal service centers, steel fabricators and other contractors that supply fabricated assemblies, machined parts and other services used in construction projects. To help them stay competitive on job bidding and meet project deadline demands, here is some of the latest fabrication equipment and tools to help them reduce their operating cycles, save time and labor, and turn jobs around quicker:

Plate Bending Machine for Extremely High Yield Strength Materials
ESCO uses the SweBend PB4-18-6 plate roll machine from Trilogy Machinery to handle complex bending radii and deliver perfect results in a single pass to accurately bend thick Hardox plates.

Tackle More Steel Fabrication Jobs with One Tool
Powered by a two-speed motor with a forward/reverse option for use when tapping holes, the HMD2MT portable magnetic drill from Hougen features a #2 Morse Taper arbor system for increased versatility.

Improve Welding Productivity, Safety and Quality on Construction Jobsites
Even hundreds of feet away from the power source, ArcReach technology with Cable Length Compensation and Adjust While Welding capabilities from Miller Electric can save up to two hours per welder per day on construction jobsites by ensuring the voltage set by welders is the same they get at the weld.

18V Large Angle Grinder for Tough Heavy Steel Fabrication Jobs
Using a new brushless motor for speed and capacity without bogging down, the M18 Fuel 7 in/9 in Large Angle Grinder from Milwaukee Tool features exclusive electronics that ensure maximum tool performance under load without overload and overheat, and a battery that exceeds higher voltage systems.

High Production, Precision Plasma Cutting of Construction Parts
Configured with a Hypertherm EDGE Connect CNC and high definition plasma system, and an oxy-fuel cutting torch, the KANO HD CNC plasma cutting machine from Park Industries is built on a unitized, precision machined, heavy duty steel base with cutting table styles and sizes available in 6 ft, 8 ft and 10 ft widths and 12 ft or 24 ft lengths.

Transform Heavy Grinding Operations
ErgoFlex abrasive discs from Walter Surface Technologies are a safer, more ergonomic, equally powerful alternative to traditional wheels used for grinding welded steel and stainless steel, heavy grinding, weld removal, and beveling.

Portable Cutting System for Steel Erection and Bridge Construction
The upgraded Arcair SLICE exothermic cutting system from ESAB has a more ergonomic torch grip and oxygen flow lever, with a better connection between the grip and the rubber shield that protects the operator’s hand from molten spray when piercing.

Robotic Turning and Milling/Drilling Cell for Construction Equipment
Fuji Machine combines their ANW-3500 fully automated twin spindle lathe with their fully automated HM-3400 milling machine, each with built-in robots, to create a turning and milling/drilling cell designed for heavy workloads.

Innovative Vertical Lathe for Machining Large, Odd-Shaped Parts for Construction Jobs
To accommodate large, odd-shaped parts used in construction work and aerospace applications, the two-axis V920EX one-saddle CNC vertical lathe from Okuma features a powerful turning spindle and a larger work envelope with a maximum turning diameter of Ø36.22 in and 33.86 in of swing over the saddle.

Portable Pipe Beveling Tools with ID or OD Clamping
The self-centering Tube Weasel right angle ID clamping tool and the C-Hog OD clamping tool from ESCO use pneumatic, electric or battery power for rigid mounting and torque-free operation of TiN-coated cutter blades with radical chip breakers that transfer heat away from the surface.

A New Generation of 3D Laser Tube Cutting
Using loading and unloading systems that automatically adapt to accommodate short and long parts and a 3 kW fiber laser that cuts up to 6 in round, square, rectangular, special and open profiles, the LT7 Lasertube system from BLM Group reconfigures itself for the next order at the end of each production batch.

Economic Precision Cutting of Large Metal Sheets and Plates
The Bystar L 4025 laser cutting machine from Bystronic uses a 6 kW resonator to easily and economically cut large format sheets up to 8 ft wide, 39 ft long and one inch thick with exceptional precision.

All-Electric Tube End Forming Eliminates Hydraulic Oil, Reduces Operating Costs
The ECOForm eRB80 IO+IO from R&B Machining performs precision sizing, diameter expansions or reductions, ram forming, flaring, notching and shearing of tube diameters up to 3.1 in with standard tooling and up to 3.9 in with heavy duty tooling with maximum wall thickness of 0.079 in.

Nesting Software Increases Productivity of Flat Sheet and Tube Cutting
SigmaNEST X1.4 CAD/CAM nesting software from SigmaTEK optimizes part nesting with faster speed and processing; integrates with ERP; supports SolidWorks 2018 and special geometry-based clamps.

Rotary Transfer Tube Machining
Special purpose rotary and linear transfer machines from Suhner can optimize a process with standard or custom systems for each machining application to help shorten overall part cycle times.

Ultimate Safety Knee Pads for Construction Welding and Fabrication
True Flex Knee Pads and True Flex Gel Knee Pads from TSE Safety feature a Stability Bar Grip Strip that creates a flat stable base when turning which is ideal for working on shop floors, and a Lo-Pro Grip Strip that allows the users to roll their knee more freely.