Wells Fargo: Industry not optimistic in early 2010
| February 16, 2010
According to the Wells Fargo construction industry survey for the first quarter 2010, most contractors and distributors are not optimistic that construction activity will improve within the year. Wells Fargo surveyed 43 service suppliers, 115 contractors and 181 distributors between January 4 and 13, 2010, for the report.
More than 76 percent of those surveyed project local non-residential construction to decline or remain the same as 2009. Although one in four construction executives foresee an increase in construction activity, almost half believe activity levels will remain at the low levels experienced in 2009. Distributors were only slightly more optimistic.
Contractors foresee a large decline in the number of contractors in their areas during 2010. In the survey, 73.4 percent of contractors expect the number of construction contractors in their area to decrease; 23.1 percent expected the number to remain the same as in 2009.
The decrease in activity caused many contractors to ask for more help from distributors. More than 66 percent of contractors believe distributors should improve price or finance options in order to improve service. Six in ten contractors planned to buy new construction equipment, and the same amount indicated they intend to buy used equipment in 2010.
Distributors believe 2010 will bring more new and used equipment sales. More than 46 percent of distributors believe new equipment sales would stay the same while 36.5 percent project sales to increase. More than 52 percent of distributors foresee an increase in used equipment sales in 2010, and around 37 percent believe sales will remain the same. Distributors indicated that manufacturers could better meet their needs by lowering price and finance options.
Wells Fargo conducts the construction survey four times each year with the support of the Associate Equipment Distributors (AED). For more information or to request a copy of the results, contact Greg Giauque.