Wells Fargo Equipment Finance releases Construction Quarterly for Q3-2012
| September 26, 2012 |
Wells Fargo Equipment Finance has released the results of its Q3-2012 Construction Executive Survey. The results, published in the company’s Construction Quarterly, reveal an improvement in construction activity; about 61 percent of respondents felt the downturn in the construction industry would last at least another year, while 81 percent responded in this way a year ago.
Construction activity is up this quarter, according to the survey results. Among construction distributors, 48.6 percent reported construction activity as “somewhat higher” or “much higher” than the previous year, while 45.4 percent of contractors reported “somewhat higher” or “much higher” construction activity. A year ago, the same responses were yielded by 37 percent of distributors and 33.4 percent of contractors.
Prices are on the rise for construction materials, equipment and rental rates. About 80.5 percent of respondents reported “somewhat higher” or “much higher” equipment prices than in 2011, 76.5 percent reported “somewhat higher” or “much higher” construction material prices and 44.7 percent reported “somewhat higher” or “much higher” equipment rental rates.
The survey shows a possible improvement in the construction industry due to the 2-year extension of the funding bill for the federal highway program that passed in July 2012. While 32.7 percent of respondents said they think it will have no noticeable effect on construction activity for the remainder of the year, 43 percent reported they think it will have a modestly positive effect and 11.2 percent reported feeling will have a highly positive effect.
According to survey results, most respondents believe the election year will not noticeably impact construction activity. However, a good portion of respondents believe the election cycle will have a negative impact. While the majority—46.2 percent—of respondents said the election year would have no noticeable impact on construction equipment purchases, 43.5 percent reported it is making a negative impact; 10.4 percent reported it will have some kind of positive impact.
The survey shows more stability in the rental market. This year, 47.8 percent of equipment distributors said they are renting more than usual, compared to 61.6 percent in 2011.More than half of contractors—53 percent—said they are renting about the same amount as usual, 20.9 percent said they are renting more than usual and 26.2 percent said they are renting less than usual.
Product availability seems to be improving, according to survey results, which show 35.8 percent of distributors are able to get the equipment they need, 23.8 percent said they will have their equipment in the next three or six months and only 13.4 percent said full availability was at least a year away; in 2011, those numbers were 15.6 percent, 17.7 percent and 33.3 percent, respectively. This year, 31.4 percent of contractor respondents reported some kind of delay when trying to obtain new equipment and 8.3 percent experienced major delays or were not able to obtain equipment at all, while the majority of contractors—36.6 percent—reported experiencing no delays whatsoever.
Read the full report, including highlights such as rental reviews and manufacturer news, here.