The latest round of the Wells Fargo Equipment Finance Construction Optimism Quotient registered at a 106, indicating that contractors and equipment distributors are optimistic that local non-residential construction activity will improve in 2013.
The Optimism Quotient is a piece of the Wells Fargo 2013 Construction Industry forecast used to gauge contractors and equipment distributors’ feeling toward annual improvement. Any mark over 100 in the Optimism Quotient is considered an indication of optimism.
This year marks the second year in a row with an optimistic reading, though this year’s reading was down from 114 in 2012. However, the 106 reading is still the third-highest national optimism rating in the past 13 years with only 2012 and 2005 being higher, according to Wells Fargo.
According to the forecast, rental fleets are expected to grow. In fact, more than half of distributors surveyed by the forecast said they expect to increase the size of their rental fleet in 2013. Only 5.5 percent expect to decrease their rental fleet.
Also, there was more optimism among contractors about residential construction than non-residential. Of those surveyed, 46.7 percent said they expect residential construction to increase while 45.5 percent said they expect it to stall out in 2013. Only 7.8 percent said they expect a decrease.
Most reassuring to equipment distributors has to be the fact that 80 percent of contractors surveyed said they plan on buying equipment in 2013. The number of contractors who said they would buy new equipment, 80.9 percent, and the number that said they would buy used, 80.3 percent, was nearly the same.