Wells Fargo’s Construction Optimism Quotient is at third-highest national optimism reading in the past 13 years: Report
The Construction Industry Forecast for 2013 is looking brighter, according to a survey released Wednesday by Wells Fargo Equipment Finance.
Wells Fargo’s Construction Optimism Quotient (OQ) – the survey’s primary benchmark for measuring contractor and equipment distributor sentiment – is at 106 for 2013, marking the second consecutive year with an optimistic (over 100) reading regarding year-over-year improvement in local non-residential construction activity. While the number is down from 114 in 2012, it still represents the third-highest national optimism reading in the past 13 years, the report stated.
“It’s great to see that contractors and equipment distributors expect non-residential construction activity in 2013 to retain the improvements they experienced in 2012,” said John Crum, senior vice president and national sales manager of the Construction Group at Wells Fargo Equipment Finance, Inc., in a statement. “For most parts of the country, we expect to see modest improvement in overall construction activity and contractors anticipate acquiring additional heavy equipment to support this activity.”
Among other optimism indicators in the report:
The industry expects rental fleets to continue to grow.Just over half of distributors (50.5 percent) indicated that they expect to increase the size of their rental fleet in 2013. Only 5.5 percent said they expect their rental fleet to decrease in 2013 compared to 2012.
Residential could lead the way.Optimism about the residential side of construction is slightly higher than for non-residential. There is significance in the fact that more contractors expect residential activity to increase (46.7 percent) than to remain the same (45.5 percent ) or decrease (7.8 percent).
Contractors will buy new and used equipment.In 2013, 80.9 percent of contractors indicated that they anticipate buying new equipment and 80.3 percent indicated that they will buy used equipment. These numbers are down slightly from 2012, but the fact that four out of five contractors indicated that their companies intend to acquire equipment should be reassuring for the industry.
This survey, in its 37th year, includes responses 347 construction industry executives from across the U.S.
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Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
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