AED: Recession is construction equipment industry depression
| July 20, 2010 |
Associated Equipment Distributors (AED) 2010 National Chairman Dennis Vander Molen, president and general manager of Vermeer MidSouth, testified before two U.S. House of Representatives committees on key parts of the equipment industry recovery agenda.
“The economic recession has been a construction equipment industry depression,” Vander Molen said. “We need to keep up the drumbeat and tell Congress what it’s going to take to help equipment distributors and manufacturers once again grow and prosper.”
On July 14, Vander Molen testified before the House Small Business Committee about the importance of renewing the depreciation bonus. This capital investment incentive, which expired at the end of 2009, allows businesses to immediately write off 50 percent of the cost of depreciable property. AED is urging Congress to reinstate the temporary tax incentive for at least one year to encourage business purchasing.
In his remarks, Vander Molen told committee members that reinstating the depreciation bonus “will encourage companies to invest in newer, more efficient equipment, help the construction equipment industry recover from its current depression, promote broader economic recovery, improve cash flow for large and small companies, and, arguably most importantly, create well-paying jobs in the near term.”
Vander Molen appeared before the House Transportation & Infrastructure Committee’s Subcommittee on Water Resources & Environment on July 15, and spoke about the economic benefits of water infrastructure investment. AED estimates that 12 cents of each dollar spent to build sewers and drinking water systems are used by contractors to buy, rent, and service equipment.
“Our nation faces an unparalleled infrastructure crisis. Immediate and aggressive congressional action is necessary to ensure that our water infrastructure does not deteriorate further and that states and localities have the resources they need to address the crisis,” ander Molen told the subcommittee members. “The problem will only be more expensive to solve as time goes on.”
Vander Molen’s testimony at both hearings emphasized the importance of these issues to the equipment industry’s economic recovery. According to IHS Global Insight, spending on construction machinery fell 50 percent during the recent recession, forcing equipment manufacturers, distributors, and maintenance providers to shed 257,000 jobs, 37 percent of the industry’s workforce.
To find out about AED’s joint campaign with the Association of Equipment Manufacturers (AEM) to promote equipment industry recovery legislation is available at http://www.StartUsUpUSA.com.