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According to survey results released today by GE Capital, Equipment Finance, participants in the construction equipment industry are more optimistic about 2013, with 75 percent saying they expect retail sales of construction equipment to increase by at least three percent this year, up 10 percentage points over last year’s survey. Within this group, 24 percent say they expect sales to increase six to eight percent.
More than three-quarters of respondents say the best time to increase inventory is within the first half of 2013. Nevertheless, nearly two-thirds cite slack demand for new construction — both residential and commercial — as the biggest hurdle facing construction equipment distributors this year.
Slightly more than half of respondents said improvement in the U.S. economy will have the greatest impact on the construction industry. Rising prices for construction materials (20 percent of respondents) and access to credit for end-users (14 percent) were the next most important factors.
“These results appear to confirm what we’re seeing, which is a gradually strengthening construction market,” said Jim Kelly, general manager of GE Capital’s Vendor Finance business. “Although there are a handful of U.S. economic issues that may create uncertainty and temporarily hamper growth in the first half of the year, it appears that retail construction is picking up, which should lead to increased commercial construction later this year or early in 2014.”
Kelly noted that the federal highway bill, passed in July 2012, should stimulate increased public works activities. Earthmoving equipment — instrumental in road building — is expected to be in greatest demand this year, according to 45 percent of respondents. At the same time, 22 percent believe compact equipment will most popular and 14 percent chose materials handling equipment.
To stay on top of developing trends, participants can access GE Capital’s Construction Industry Research Monitor here:
GE Capital’s survey was conducted Jan. 15-17, 2013. The 49 respondents included a variety of construction industry participants.