For some sectors of the machine and equipment industry, the big story beyond order growth is steel price growth.
      Many off-road equipment manufacturers — major steel consumers — say rising costs and decreasing availability have forced many of them to put expansion plans on hold. Others say they are actively looking to move operations outside the U.S. to find cheaper steel. A late 2004 survey, conducted by the Association of Equipment Manufacturers, reveals that close to one-third of respondents have shifted production off-shore, while 28 percent have delayed capital expansions and 15 percent have reduced operations or shut down entirely.But despite the sobering news, construction equipment companies are pushing ahead with growth plans, fueled by improving sales.
      Take Caterpillar. The company is on a roll, according to company spokesman John Dugan. Last year, the company experienced record sales volumes, driven by increased machinery and equipment sales and production efficiencies. Sales increased 30 percent in 2004 with 10 percent growth projections for 2005. "We are expanding at an existing engine center in Lafayette, Indiana," Dugan says. In addition, the company is adding a logistics center in the Chicago area.
      Another hot spot for the company's growth? Remanufacturing, a process that involves taking back a used Cat engine, stripping it down and building it back for re-sale.
      "This is very big for us right now," says Dugan. "We'll be expanding our facilities to offer this service to other companies. We also plan to buy other companies that are doing this." Cat recently announced the purchase of Wealdstone Engineering LTD, a U.K.-based engine remanufacturer.
      Other equipment remanufacturers are experiencing similar success. Finning International, a Canadian Cat equipment dealer, has invested $54.8 million in a new component re-build center in Edmonton, Alberta, to remanufacture Caterpillar engine and hydraulic and power train components.