Compaction Sales Even StrongerWritten By: Mary Seaman
Article Date: 10-03-2005
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Manufacturers are reporting increses of 20 percent to 65 percent in 2005.
With the recent passage of the $286.4 billion transportation bill, the compaction market is expected to continue to flourish as contractors are awarded more highway work. Most compaction equipment manufacturers are forecasting double-digit growth this year.
"The most significant development in the market is the SAFETEA-LU authorization," says Josh Trelease,
vice president compaction equipment for Tiger Equipment. "This will result in more and extended projects, which will ultimately require additional equipment."
The robust economy has also brought increasing numbers of building projects.
According to Bruce Monical, Hamm compact division, Wirtgen sales of asphalt compactors are up over 2004, which he attributes to "expanded residential street demand and continuing work on infrastructure projects."
A resurgence in sales of single-drum soil compactors, says Monical, has resulted from "large rental companies purchasing compaction equipment, as well as the increase in new housing starts that require land clearing and soil compaction."
"The overall compaction market should have an increase of approximately 20 to 25 percent over 2004."
Both Allied Construction Products and Tiger Equipment (Intensus Engineering, Inc.) expect a 30 percent increase in 2005, while Vibromax America and Sakai America are expecting increases closer to 50 percent and 65 percent, respectively.
"We're up 112 percent in the first four months of the fiscal year," says Dave Brown, vice president of sales and marketing for Sakai. "We anticipate that the signing of the transportation bill will bring more confidence to the road building contractor and enable him to make sound decisions when it comes to purchasing equipment over the coming years."
Increased compactor rentals have also meant increased compactor sales. As rental companies and equipment dealers expand their rental fleets to meet the growing demand, they are adding new machines and replacing aging compaction equipment. In addition, many manufacturers surveyed say compactors are often rented before they are purchased.
"New equipment sales have increased because many rental companies found they didn't have the inventory to meet customer demand," says Torsten Erbel, director of product development for Multiquip. "This high demand for rental equipment has increased the utilization of compaction equipment, as well as promoting additional capital investment in those products."
Al Springer of Allied Construction Products agrees: "As contractors get more jobs, they need to put on more cre
s to do those jobs. Rather than buy the equipment for new jobs and new crews, they will rent it."
Some manufacturers, however, say rental has not impacted their new equipment sales significantly.
"There has been a slight increase in the rental of asphalt equipment recently," says Sakai's Brown. "We hope that with the passage of the transportation bill, many of these rentals will become sales."
In addition to the highway bill, manufacturers say technological advances have contributed to the increase in sales.
"Ergonomics have become a prominent issue," says Russell Warner, product marketing manager, Ingersoll-Rand.
Manufacturers are beginning to understand the importance of isolating the operator from noise and vibration as much as possible."
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