Non-residential activity expected to increase in many areas across
the country
Construction contractors and equipment distributors are optimistic that
local non-residential construction activity will improve in 2013,
according to a survey by Wells Fargo Equipment Finance, Inc., a
subsidiary of Wells Fargo & Company (NYSE: WFC). As part of its 2013
Construction Industry Forecast, 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 reading. An OQ over 100 is
considered optimistic sentiment towards year-over-year improvement in
local non-residential construction activity.
“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. “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. As a market leader in this industry, Wells Fargo is pleased by
this continued optimism and remains committed to helping contractors,
equipment distributors and manufacturers obtain the construction
equipment financing and leasing they need in order to be successful.”
Highlights of the 2013 Construction Industry Forecast include the
following:
Construction is moving ahead. The bell-weather indicator for this
survey – the Optimism Quotient – is a very positive 106. Although the
number is down from 114 in 2012, it still represents the third highest
national optimism reading in the past 13 years with only 2012 and 2005
being higher. Executives continue to express sentiment that
non-residential construction activity in 2013 will improve compared to
2012.
The industry expects rental fleets to continue to grow. Optimism
among construction equipment distributors remains high. Rental fleet
growth is anticipated to play an increasingly important role in the
business model of distributors. About half of distributors (50.5%)
indicated that they expect to increase the size of their rental fleet in
2013. Only 5.5% 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 was slightly higher than for non-residential. There
is significance in the fact that more contractors expect residential
activity to increase (46.7%) than to remain the same (45.5%) or decrease
(7.8%).
Contractors will buy new and used equipment. In 2013, 80.9% of
contractors indicated that they anticipate buying new equipment and
80.3% 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 marks the 37th year in which Wells Fargo
Equipment Finance, Inc., and its predecessors, have published primary
research findings for the infrastructure construction industry.
Conducted between January 4 and January 18, 2013, the survey includes
responses from 347 construction industry executives from across the U.S.
To download the complete report, visit:
http://images-mail.wellsfargoemail.com/Web/WellsFargoWholesaleServices/{18f01273-a35a-4bbd-9a43-15812689842b}_2013_Wells_Fargo_Construction_Industry_Forecast_FINAL.pdf
About Wells Fargo Equipment Finance
Wells Fargo Equipment Finance is the second-largest bank-affiliated
equipment leasing and finance company in the United States by asset
portfolio and annual originations, with more than 140,000 customers, 55
branch locations, and 1,200 team members. Wells Fargo Equipment Finance
is the trade name for the equipment leasing and finance businesses of
Wells Fargo, consisting of Wells Fargo Equipment Finance, Inc., a
Minnesota corporation headquartered in Minneapolis, Minnesota which is a
wholly owned subsidiary of Wells Fargo Bank, N.A.; Wells Fargo Financial
Leasing, Inc., an Iowa corporation headquartered in Des Moines, Iowa;
and the Wells Fargo Equipment Finance division of Wells Fargo Bank,
N.A., located in Lincolnshire, Illinois.
About Wells Fargo
Wells Fargo & Company (NYSE:WFC) is a nationwide, diversified,
community-based financial services company with $1.4 trillion in assets.
Founded in 1852 and headquartered in San Francisco, Wells Fargo provides
banking, insurance, investments, mortgage, and consumer and commercial
finance through more than 9,000 stores, 12,000 ATMs, the Internet (wellsfargo.com),
and has offices in more than 35 countries to support the bank’s
customers who conduct business in the global economy. With more than
265,000 team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 26 on
Fortune’s 2012 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy all our customers’ financial needs and help
them succeed financially.