South Central Dealers Report Demand Is SteadyAugust 2007
Article Date: 08-01-2007
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While concerns remain about material costs and federal funding, equipment dealers in the South Central states are reporting a steady market for 2007.
"It's hard to see beyond a year," says G. Bennett Closner, president and CEO of Closner Equipment in San Antonio and senior vice president of AED. "But in Texas, and other areas of the South, we're optimistic."
AT CLM Equipment of Lafayette, La., Vicki Collins, director of human resources & marketing, says demand is still high, but supply is starting to catch up.
"Demand is probably consistent with the last year or two, but manufacturers have stepped up production," Collins said.
Remembering a period three years ago, when contractors were often required to provide at least four months of lead time to equipment distributors, Collins said, "It was bad. We didn't have iron on the ground and we didn't know when we could get it."
Today, she says, many manufacturers have machines sitting in their warehouses and can ship immediately. Lead times rarely exceed 60 days. With some manufacturers ramping up supply and the housing market slumping in parts of the country, Collins says prices are beginning to come down for some products.
Still, says Closner, if material costs continue to escalate worldwide, prices will have to go up.
"And if federal funding isn't there," he said, "fewer projects will be let. That's already happening in Texas on governmental projects."
Housing, however, is not a concern in Texas.
"People are coming to Texas," said Closner, "and other parts of the South looking for places where the cost of living is less and there is job growth."
Jim Anderson, president of Corpus Christi-based Anderson Machinery agrees and says his first-half profit margin this year was better than the second half of 2006.
-Eileen Schwartz is editor of Texas Construction.
-Sam Barnes is editor of Southcentral Construction.
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