Wells Fargo EF: Construction Activity Up Y/Y
Published September 26, 2012
The Q3/12 Construction Executive Survey by Wells Fargo Equipment Finance revealed a distinct sentiment that construction activity has improved compared to a year ago. However, 61% of respondents said the downturn in the construction industry would not be over for at least another year. A year ago, that number was 82%.
Other key survey findings, according to John Crum, national sales manager of Wells Fargo Equipment Finance’s Construction Group, include:
• Legislative environment. Passage of the new two-year funding bill for the federal highway program has sparked some modest optimism that construction activity might improve in the near term. However, the uncertainty surrounding the 2012 election season is perhaps dampening that optimism.
• Pricing. The trends are all up. Executives say they have seen at least modest cost increases on construction inputs such as materials, equipment acquisition and equipment rental. The trend is more pronounced than last year.
• Equipment availability. In contrast to a year ago, neither contractors nor distributors expressed much concern about product availability. There are essentially three camps that each represent about one-third of contractors surveyed: 1.) those that have not tried to acquire equipment, 2.) those that have had no trouble getting the equipment they need and 3.) those that have experienced mostly minor delays.
• Looking forward. There remains an aura of uncertainty about the future that seems to be tempering the optimism that has emerged as a result of increased construction activity. A significant number of executives said that they don’t intend to hire (43.6%) or that they will likely only hire a few new employees (37.0%) in the next six months.
For detailed survey results click here.