Federal Emission Rules and Soft Markets Slow Northeast’s Sales, Rentals August 2007
Article Date: 08-01-2007
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New federal emissions rules and a slower residential market are influencing construction equipment sales in the Northeast, but business may rebound this year, say regional dealers.
In upstate New York, heavy equipment sales were off in the first half of 2007, says Scott Collins, vice president of sales and marketing for Tracey Road Equipment of East Syracuse, N.Y., which sells highway, municipal, utility, transportation, and excavation units and has other locations in Binghamton, Rochester, Albany and Watertown.
"Our market right now is flat," said Collins. "Last year was a record year for us. This year we're off 40 percent."
Collins says last year's strong finish stemmed from new federal emissions rules for on- and off-road equipment. The rules - which mandate use of ultra low sulfur diesel fuels (ULSD) and cut emissions of nitrogen oxides and particulate matter - went into effect this year for non-road equipment, spurring customers to buy up older inventory.
"ULSD rules have driven up the cost of some equipment by $8,000 to $12,000," says Jerry Tracey, president of Tracey Road Equipment. Higher fuel prices have also hurt sales, according to Tracey.
Although Pine Bush Equipment of Pine Bush, N.Y., also saw customers buy up last year's equipment, says Holly Bodnar, the firm's president, revenue is steady.
"This year, our sales in units are lower but the types of units that are selling are larger, so the dollar volume is similar," she said. "Buyers who use larger equipment are busy now, especially in commercial work."
The slowest sector in upstate New York this year is residential, Collins says: "Housing is deplorable right now."
Residential is also slow around the Hudson Valley area and in Connecticut, where Pine Bush is active.
Still, mini-excavators, which have been sales leaders in recent years, remain strong sellers, according to Bodnar. She also says wheel loaders are strong.
Despite the early blip this year, Tracey says sales should pick up in the fourth quarter.
"I think '08 will be another strong year," he said
-Tom Stabile is editor of New York Construction magazine.
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