CONEXPO/CON-AGG is upon us. Much has changed since the last one only three years ago compared to now, especially the economy. Three years ago, the construction industry was trying to find some stability, grow and continue to make headway. Today, we find ourselves in slow, but steady growth, and a relatively stable landscape.
Note: CP will have an outside booth at World of Concrete (WOC) in Las Vegas, a booth at The Rental Show in Orlando and a booth at CONEXPO/CON-AGG in Las Vegas.
Economy: The Last CONEXPO vs. Now
During the last CONEXPO in 2014, the market was just finding its footing. We were not where we are today, but the positive gains were certainly important for economic progress. The 2014 show truly was an important one for our industry, as it marked the first CONEXPO that provided a glimmer of hope for the construction industry after the financial crisis in 2008 that negatively impacted nearly every single industry in the United States, including ours.
Many of us who have seen our fair share of trade shows could agree that the general tone of the 2014 show can be defined as cautiously optimistic, as many were hopeful, but the reality of the financial crisis was still apparent for show-goers. Looking forward to the 2017 show, we believe that it should prove to be teeming with confidence from contractors, channel partners and manufacturers alike.
The Associated Builders and Contractors recently published a Construction Confidence Index for nonresidential construction, which measures forward-looking construction industry expectations in sales, profit margins and staffing levels. The index is a scale from 0 to 100; above 50 indicates growth, while readings below 50 are unfavorable.
“The increase in new equipment sales indicates a more confident marketplace, and represents a new era of stability in our industry.”
According to the index, in 2014 confidence in sales was at 67 percent, 61 in profit margins and 66 percent in staffing levels. Those numbers dip slightly in 2016 to 65 percent (sales), 61 (profit margin) and 65 (staffing level). Keep in mind though, that there was more market uncertainty three years ago, compared to now, when experts agree that we are on relatively solid ground. In addition, a $305 billion highway bill was signed late last year. So, there is plenty of work to be had now and in the future.
Today, construction activity is at a high level in many areas of the United States.
Despite that, construction spending actually dipped in the last quarter of 2016. Even so, it was up from January through September 2016 compared to the first nine months of 2015 for an overall increase of 4.4 percent.
New Equipment Sales in the United states
In regards to trends in construction equipment sales, Equipment Data Acquisition (EDA) shows a strong 2016, in which new equipment sold over 90,000 units between January to October. Compare that to last year, where nearly 8,000 fewer units were sold during that same time span.
Even though we’re still missing figures for the last two months of 2016, new units sold figures are at nearly the same number as it was in the full 2014 year (a CONEXPO year). And, if you want to know just how far the economy has climbed — during the financial crash in 2008, the total new equipment units that were sold in 2009 made up approximately 40 percent of the current 2016 units sold so far.
According to EDA, used equipment sales have been consistent for the last several years. Up until recently, the used equipment category has represented the majority of equipment sales since 2008. But, starting in 2015, the trend shifted, and new equipment sales make up a larger percentage of total equipment sales in the United States.
The increase in new equipment sales indicates a more confident marketplace, and represents a new era of stability in our industry. We have certainly felt that uptick here at CP with strong sales over the last few years.
Attending CONEXPO this year will have a different feel to it than it did in 2014 and that is a very good thing. All signs point to both a positive show and market outlook in 2017. We are ready to get started and hit the ground running as our team gears up for three very important trade shows.