Construction Industry Improving, Challenges Still Ahead
Activity improves, but industry faces slow job growth and higher prices
MINNEAPOLIS--(BUSINESS WIRE)-- Despite business improvements in the overall construction industry, contractors and equipment distributors expect the overall downturn in the construction industry to last at least until late 2013, according to the latest Construction Executive Survey from Wells Fargo Equipment Finance, part of Wells Fargo & Company (NYS: WFC) . Conducted in August, the quarterly survey recorded the responses of approximately 250 construction industry executives across the U.S.
"The survey results demonstrate some improvements in the construction industry over the past 12 months, but construction executives are clearly still cautious," said John Crum, senior vice president and national sales manager of the Construction Group at Wells Fargo Equipment Finance, Inc. "Although the industry is still facing challenges, we expect to see modest improvements in the non-residential sector. At Wells Fargo, we are encouraged to see this year-over-year increase in activity and remain committed to serving our customers' construction equipment financing and leasing needs."
Highlights of the Q3-2012 Construction Executive Survey:
Construction activity improved: Nearly half of construction executives (47.8%) said construction activity was "somewhat higher" or "much higher" than a year ago. In the 2011 survey, 38.4% said activity was higher and in 2010, only 28.5% said activity had improved over the previous year.
But full recovery could take a while: Although executives acknowledge year-over-year improvement in construction activity, a full 61.0% said the downturn in the U.S. construction industry will not be over for at least another year. In the 2011 survey, that number was 82.2%.
Job growth is tentative: 43.6% of the construction executives said their company is not hiring new employees within the next six months. While 41.0% said their company would hire some workers in the short term, 15.5% said they may or will have to reduce their workforce.
Prices are rising: Four out of five respondents (80.5%) said they are seeing "somewhat higher" or "much higher" equipment prices compared to a year ago. More than 75% (76.2%) said that prices for materials are "somewhat higher" or "much higher" than a year ago.
The Q3-2012 Construction Executive Survey continues the longstanding practice by Wells Fargo Equipment Finance, Inc. and its predecessors to publish primary research findings for the construction industry. To access the complete report, please visit: https://www.wellsfargo.com/com/financing/equipment-financing/publications
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About Wells Fargo
Wells Fargo Equipment Finance provides competitive fixed- and floating-rate loans and leases covering a full range of commercial equipment for businesses nationwide in the United States and Canada. Canadian business is transacted by Wells Fargo Equipment Finance Company. WFEF also offers floor planning and inventory financing, and vendor programs in selected industries. Wells Fargo Equipment Finance, Inc. 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 & Company (NYS: WFC) is a nationwide, diversified, community-based financial services company with $1.3 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 approximately 265,000 full-time equivalent team members, Wells Fargo serves one in three households in 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.
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