Construction equipment sales expected to grow
February 11, 2013
A good indicator of the strength of the construction industry is whether firms are buying new equipment to complete their projects. Recent research conducted by GE Capital Equipment Finance revealed 75 percent of participants in the construction equipment industry expect retail sales to increase by at least 3 percent this year.
Many firms jump at the opportunity to upgrade their equipment and technology during the beginning of the year. Roughly 75 percent of respondents say the best time to increase inventory is within the first half of 2013.
"These results appear to confirm what we're seeing, which is a gradually strengthening construction market," said Jim Kelly, general manager of GE Capital's Vendor Finance business.
Economy affecting equipment purchases
The volatile economy has played a role in the behavior of both consumers and businesses in recent years, making it difficult to forecast the right time to spend. According to the research, 20 percent of respondents are influenced by rising prices from construction materials, while 14 percent report another important factor is access to credit for end-users.
"Although there are a handful of U.S. economic issues that may create uncertainty and temporarily hamper growth in the first half of the year, it appears that retail construction is picking up, which should lead to increased commercial construction later this year or early in 2014," said Kelly.
However, public works may be picking up throughout 2013 as the federal highway bill that was passed in July will take effect and many construction projects on roads and highways are set to begin.