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The construction and mining machinery industries are expected to do well over the next 12 months, from 3rd qtr 1996 to 3rd qtr 1997, as the US economy expands and international markets recover. These stocks have done increasingly well throughout 1996. An investor should be selective because major selloffs may take place at any time.

Recovery in foreign markets and a slowly expanding domestic economy are leading to good earnings for the construction and mining machinery industry. American exports have become attractive due to the weak dollar and corporate restructuring has made the industry more efficient. These stocks have done well since May 1995 and are expected to outperform the market through the end of the year, but have low price stability.

The construction and mining machinery industry is enjoying strong domestic sales, thanks to construction spending that is higher than pre-recession levels. Interest rate increases could put a brake on new orders, but foreign demand should boost sales and profits through the late nineties. Although these stocks are valued low, several are promising, albeit for investors willing to accept some risk.

Strong domestic and foreign demand for mining and construction machinery should give this sector a boost in 1994 to 1995, but the area is not without risk. Companies are reporting very good growth, and sales are expected to be strong throughout 1995. US products are priced relatively low compared to other nation's machinery, due to the slumping dollar. The best time to buy these securities is in the early part of the cycle when investors expect earnings recovery and bid up the shares.

The construction and mining equipment industry is expected to experience strong growth. Strong domestic demand and improvements in foreign markets will drive this predicted rise in sales and earnings. The industry's strong performance will continue because of past restructurings that have improved business fundamentals. Investments in the industry offer some good prospects for capital gains.

Stock offerings for companies in the construction and mining machinery industry may offer cautious investors a good investment opportunity. The companies posted 1st qtr 1994 earnings that surpassed industry analysts' forecasts. Domestic demand, as well as increasing foreign demand, is raising the order rates and keeping prices firm.

Stocks in the construction and mining machinery industries performed well in 1993 and should continue to do so in the US during 1994. Capital spending should be fueled by low interest rates during the year. Although the industries are improving in the UK and other countries abroad, investors should be cautious with regard to overseas markets, which may not improve as quickly as expected.

The forecast for the construction and mining machinery industry is optimistic because of the improving economy. The industry has improved its financial position by cutting manpower, installing more efficient equipment, reducing capacity and refinancing debt at lower interest rates. Sales and profits for the industry have increased during the first nine months of 1993.