Despite an impressive valuation of $1tn in 2012 by the Construction Intelligence Center, the US construction industry suffered a 5% dip during the 2008-2012 downturn. Residential construction, the US construction industry’s largest market, was hit by the housing crisis, while commercial construction took the largest dip in productivity in the 2008-12 period, clocking a disastrous CAGR of -13.82%.

Construction upturn in sight?
However, the future is brighter for most construction sectors, according to the same report, which predicts that commercial construction – now the fastest growing construction market – is set for a 6.13% upturn before 2017. Despite this, there remains deep underlying negativity from many business leaders from the cranes industry, who name-check problems that have affected the wider economy – namely low consumer spending, high levels of unemployment and low wage growth.

With US unemployment at its highest since World War II, according to economist Chad Stone of the Center on Budget and Policy Priorities, there is still a jobs emergency is the country, despite positive rhetoric from President Obama, who is taking steps to live up to last year’s State of the Union promise to help create "goodpaying American jobs".

Rob Beightol, product marketing manager, Gorbel says that Obama’s promise needs to be fulfilled: "Although many cranes are designed to improve processes and allow companies to ‘do more with less’ in certain environments, it remains vital to the industry that unemployment and underemployment issues are addressed. While crane companies are in the business to business field, consumer spending can be a driver in the business, and this requires jobs."

Stimulating a manufacturing boom
To ensure the job market bounces back, Obama is looking to ensure that the ailing manufacturing sector gets back on its feet. As a result, some ambitious projects have received government backing, including a new public-private manufacturing hub in North Carolina, backed by $70m of federal money to develop the electronics for the next-generation of power, in keeping with Obama’s call for 2014 to be "a year of action".

Further boosts to the economy could come from the automotive sector, which according to many is booming across North America. Jeff Schuster, analyst with LMC Automotive in Troy, Michigan, recently told Detroit News that the recovery phase for the sector is finishing with a return to more normalized growth.

Dicesare agrees, and says the US automobile industry is out performing other sectors, rebounding because of quality and technology advances. However, while he singles out various other sectors for growth, he insists that government needs to listen to what businesses want. "The food and drink industries will profit because of natural population expansion, but Obama’s administration is still not favouring business small or large. The past several years have been some of the slowest ever. Our businesses and manufacturing sectors need to have less restrictions to deal with and greater tax incentives to purchase products as well as hiring. Manufacturing as a whole has to come back strong for the economy to come back."

The right products for the right markets
Further compounding US growth is a widespread lack of confidence, prompted partly by the lingering memories of recent tough times, according to Beightol, who says that US businesses are being extra vigilant before splashing the cash.

He adds: "Despite record profits, some large firms seem to be waiting for the ‘perfect’ time to spend. This may stem from just how deep the wounds were for some traditional firms in the latest recession. It seems like many decision makers today are more reluctant to make major investments unless a definite ROI can be determined."

To achieve this ROI to compete in the North American market, businesses must provide innovative solutions first and foremost, according to Gieske. "The types of crane manufacturers that will strive are those that supply solutions and products that the customers want and supply the customer support that demanding customers expect form a world class crane company. Technology is advancing exponentially and the Industrial Internet products we are incorporating into our cranes and all the benefits this can bring to our customers are sure to top the lists in all sectors."

President Obama, who has been keen to lower business taxes as well as jobs, is also attempting to create increased credit access and lower interest rates. For Beightol, this could get the economic wheels to turn again. "When consumers spend more on homes, automobiles, appliances, and related goods chances increase for expansion on the part of companies manufacturing these goods. Crane companies also benefit from this expansion with everything from adding production lines or work cells to breaking ground on new facilities," he adds.

Last year US investment only rose about 2.3% overall, less than half the rate of 2012. However, extenuating circumstances – namely the government shutdown in October and a bitter political fight over tax rates at the end of 2012 – kept companies from investing, meaning 2014 is likely to improve, on paper at least. Elsewhere, Washington is drawing up plans to pass budget bills to fund the government through the next two years with no new tax increases expected.

Staying warm and healthy
Another key issue for recovery in the US is the divisive healthcare system, which many fear cannot be afforded by the system if there is high demand for treatment. Bernd Forwick, product manager – cranes, Demag Cranes & Components Corp, says: "The job market in the US is tightly tied to the government health market. Changes in healthcare policy could see more part time jobs, which would affect full time employment and consumer spending."

Despite these healthcare issues, there is a general agreement that green shoots are in sight for the US economy. Joe Dicesare, vice president of FHS, concurs, says that from his perspective it looks like the construction industry is crawling back. "The gas and oil states are doing very well with purchasing products from the material handling industry the rest of the country I hope will soon follow. The low cost of fuel should help us greatly too. The future of the overhead crane industry looks more promising and I look to be cautiously optimistic."

Steel-ing the show
Many statistics back up this confidence, including the Construction Intelligence Center’s prediction that the US infrastructure market is tipped for a near 6% CAGR upturn and will value $410bn in 2017. Obama’s $350bn nod to a variety of grandiose infrastructure schemes – including the US 95 North West Corridor Improvements Project and the Kalamazoo Dearborn high speed rail corridor scheme – will stimulate construction and jobs.

This infrastructure stimulus is good news for the crane market says Forwick, who spies opportunities for overhead crane use. "I think the investment in infrastructure bodes well for us as there will be a lot of projects that require lifting heavy loads in an industrial environment, he adds. "To put this in perspective, our company was coming from a high as far as industrial orders in 2007-08 before the bottom fell out and industrial production went to hell during the much-publicised recession. Luckily now they are coming up again and it looks like we could eventually reach those peak levels gain, enjoyed before the downturn. "

Meanwhile, Konecranes’ vice president – crane sales region Americas Juergen Gieske says that these infrastructure initiatives always consume steel which helps the steel markets and crane purchases. "The Steel market is currently a bit anaemic. While mills appear to be fairly busy making steel products, there aren’t a lot of large expansions like we have seen in the past. A few new mills are on the books and let’s hope these proceed.

He adds that aluminium has been a "hotter" market due to the new mandates and emphasis to produce more fuel efficient cars and trucks. "Overall, automotive is flat but at a healthy level and, as such, aluminium plants have been gearing up for rolling automotive grade exterior body panels. Mining, meanwhile, is soft presently throughout the Americas. This is further evidenced by other companies that are anticipate down businesses in the mines like Joy Global and Cat as they reported lowered results."

Positive projections
A significant number of economists, meanwhile, predict that the US will meet or beat its growth targets. A recent forecast by top economists predicted that for the first time in nine years, 2014 will see the US economy hit 3% growth.

For businesses who have been recording strong recent performances, this will come as no surprise. Bret Lussow, VP business development, Harrington Hoists, says 2014 is looking positive. "The last six months of 2013 were particularly good for us and 2014 is starting off very well and we anticipate a solid year. All segments are strong; manual and powered hoists through traditional end user and distribution channels. The entertainment industry is particularly strong for Harrington as the need for more extravagant stages, lighting and sound is driving the demand for hoists (motors)."

A recent tour of the US by Street Crane Company yielded similar optimism. Chris- Lindley-Smith, sales director at the company says he had a chance to ensure Street Crane Company’s products were well received and found that reaction to its ZX hoist range was very encouraging. "Built to BS and EN standards, they exceed the requirements of CMAA, so when visiting crane manufacturers from Chicago to Florida we found there was an appreciation that this range offers greater flexibility and more advanced technology than traditional hoists with the bonus of additional safety, robust performance and significantly improved maintainability."

European relations
It’s not just US stimulus that The US is counting on however. Forwick says that his company has a unique opportunity to meet North American customer needs by leveraging global best practices. "I see a high number of companies from Europe building subsidiaries in the US creating new plants and opportunities for us," says Forwick. "Some of these plants are very substantial and come often from England, Germany and Southern countries including Italy.

Some of the companies we work with are involved with supplying the automotive industry with parts and we also are seeing an expansion of the aircraft industry from the European market."

The benefit of co-operation with Europe has not gone unnoticed by Obama, who is deep in negotiations towards creating the world’s biggest free-trade deal, the Transatlantic Trade and Investment Partnership (TTIP), which was originally postponed because of the government shutdown and damaging claims by hacker Ed Snowden that the US listened to German leader Angela Merkel’s mobile calls.

Together, the US and EU account for about $30 trillion (£18.7tn) of annual output – almost half the world’s total.

Above and below the US
In Canada, meanwhile, the picture is similarly mixed. Auto makers are waging a last-ditch fight to kill a potential Canada- South Korea free trade deal, which could damage the Canadian auto industry and the wider economy. Meanwhile, the steel industry is facing crucial developments, with The Canadian International Trade Tribunal voting in an expiry review to continue imposing dumping margins on structural tubing from South Korea and Turkey — but not for South Africa.

"Canada is an important market for us," says Forwick. "I think Canada is economically stable, and has weathered some of the ups and downs reflected in the US economy. It is an important export market and we are seeing the US dollar gaining strength against the Canadian dollar, which affects our market prices up there. The automotive industry in Canada is operating under NAFTA, producing parts, sub assemblies and complete vehicles for their domestic as well as US and Mexican markets," he adds.

Like the US, however, the Canadian economy has unemployment problems to counter. The country lost a startling 45,900 jobs in December 2013 to finish the weakest year of job growth since 2009. The unemployment rate rose to 7.2% for the final month of the year, compared with 6.9% in November.

Despite this, Lindley-Smith has nothing but praise for Canadian trade. He says: "Our hoist sales to North America as a whole are 24 per cent up this year compared to last with the majority of our sales being to Canada where we have been an established supplier for many years."

He adds that the USA has always been a more difficult market, particularly over the last five years. "It’s been tough in the US market, but recovery now seems to be firmly established and there is a positive feeling with new projects proceeding, firms reporting increased orders, without buyers holding back payment."

In Mexico meanwhile, manufacturing production was down 1% in year ending November 2013, according to Wells Fargo. The battered construction sector, however, posted a growth rate of 1.8 percent from October. This is good news, and should continue during the next several quarters, according to the report, which will help drive industrial production.

Lussow says that activity in both Canada and Mexico has been encouraging for Harrington Hoists . "We are seeing more and more demand for 3rd party certification. Harrington is proactive in achieving 3rd party certification on many existing and most new products we produce," he adds.

Overall, North America is a mixed bag in terms of its outlook. Upbeat talk from the US government, backed up by statisticians and industry professionals alike suggests the construction and crane markets can look forward to a gradual return to health.

The US shutdown and political infighting of 2013 are a heartbeat away, but renewed political steadiness looks to be bringing increased confidence to consumers. Foreign investment is also benefitting North America, particularly from Europe. The future for the region then largely depends whether the political and economic turmoil of the past will fade in the collective memory of not just North American but the world.