With concern about the financial crisis in Europe, inflation in China, and the appreciation of the yen, the market environment surrounding the Japanese manufacturing industry is just getting harder all the time. For 2 years in a row, in 2011 and 2012, the forecast in the construction machinery industry calls for an increase over the previous year, with the industry maintaining its good showing.

The Japan Construction Equipment Manufacturers Association, an industrial organization for construction machinery manufacturers, made a forecast last August related to demand in 2011 and 2012. According to the forecast for 2011, the domestic demand should be up by 24% over the previous year due to use in recovery from the earthquake. Exports to developing countries, chiefly in Asia, and to countries engaged in the development of resources, should also be up. Adding in the clear recovery in demand in North America as well, overall exports should likewise be up by 16%. The total value should come to 2.02 trillion, up by 18%. It is expected that 2012 will continue to show the same trend. The forecast calls for an 11% increase, reaching 2.2 trillion.

Looking at very recent data as of November of last year, shows that the demand in Japan was up by 16% over the previous year, while the overseas demand was up by 15.1%, moving along at a total monetary increase of 15.4%. While the domestic demand has grown for 8 consecutive months, the overseas demand have recorded an increase for 23 consecutive months. A period of 11 months in 2011 has already exceeded the results for all of 2010. Although the reduction of public investment in China is a matter of concern at this point, it does seem that the vigorous performance of construction machinery should continue in 2012 as per the forecast by the association.

Essentially, amount of shipping of Japanese construction machinery, did experience a major drop, hit as it was by the Lehmann Shock of 2008. Amount of shipping for 2009 in monetary terms came to 462.4 billion, down by 39.8%, while for exports the figure was 1.1 trillion, down by 36.5%, making for a total amount of 1.6 trillion, down by 37.5% over 2008. Even though it can be said that for both the 2 consecutive years of 2010 and 2011 the figures exceeded those of the previous year, they had still not reached the 2008 figures, a situation which cannot exactly be described as doing marvelously well.

Even so, amidst disconcerting elements such as concern about the economic uncertainty in Europe, inflation in China, and the appreciation of the yen, what is certain is that Japanese construction machinery has obtained the trust of users around the globe. Construction machinery is indispensable for municipal development involving such aspects as highways, bridges, and skyscrapers, as well as the development of resources such as mines. While price and performance are factors, durability and reliability are also very important. This is not simply a matter of how good the machinery remains as the years go by, but also included here is the operational ratio. With so many breakdowns, if the operational ratio does not increase, productivity will worsen. What would be ideal to reduce the time for exchanging of parts and maintenance as much as possible, and to maintain a situation in which the machinery is always running. Rather than being a vehicle like a car, construction machinery is more like the machinery in a plant. Its outstanding feature of that it is extremely durable, and being able to work without rest, has led Japanese made construction machinery to acquire a reputation worldwide of being extremely reliable. Even with the appreciation of the yen, this reputation has lead to repeat orders. That construction machinery is moving along so well has led to anticipation that the demand for welding and cutting gas would rise as well. This did not lead to a direct demand for gas in Japan, however, because the manufacture and assembly of construction machinery has been m