Dive Brief:

• The construction equipment industry is going through a stock-liquidation phase after producing too much in early 2012, economist Eli Lustgarten of Longbow Research says.
• Overall construction should grow by 6% to 10% annually from this year through 2018, and equipment sales will go up, too.
• Because of tax incentives that are going away now, companies bought equipment faster than their business recovered, so manufacturers ramped up production, but that has slowed.

Dive Insight:

Lustgren told the Association of Equipment Distributors that construction in the U.S. will be driven by natural gas and oil exploration and development, the widening of the Panama Canal and resulting shipping activity and by increases in the numbers of both the elderly and children. Among his predictions, Lustgren said the U.S. housing market's future "is reasonably decent provided interest rates don’t get out of whack."