Dealers Have a Lot to Say About '08By Kim Phelan
Article Date: 01-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.
Confirming once again, it's a patchwork market out there.
Welcome to Chicago! To all the business-savvy distributors, industry suppliers and service companies that have traveled to AED's 89th Annual Meeting & CONDEX, I extend my own thanks for making this major dealer meeting a priority.
Besides being the ‘at-show' edition of Construction Equipment Distribution magazine, this January issue contains the (famed?) Annual Business Outlook - authored this year by yours truly for the first time - which sums up results from CED's survey of all AED member dealers and also includes some highlights from a dealer survey jointly conducted by AED and Reed's Construction Equipment magazine.
What impressed me most about dealer responses to CED's survey was not so much the collective conclusions that surfaced, but rather, how dealer executives used the questionnaire as a platform in which to describe the atmosphere they're experiencing in their regional markets. In fact, to my surprise, more than 30 dealers wrote in brief but insightful comments about conditions they expect will affect their businesses in 2008.
So intrigued was I by some of their commentaries that I telephoned about a half-dozen of the dealers who wrote them to hear more details straight from the, uh, horse's mouth - and their perspectives are included in the outlook story. But there were a great many additional nuggets of distributor truth that didn't make it into the report - journalistic junkie that I am, I'm compelled to share as many of these valuable gems as will fit on the remainder of this page:
"Part of the advantage of being in the middle of the country is that we tend to stay away from the big swings in construction activity. We don't get the high highs, but that usually means that we don't get the low lows either. (The early 1980s were an exception that I hope to never see repeated.) I hope that we see the same relatively flat trend line for the next few years."
Thanks for reading!
From the Southeast: "Housing is way down and should continue down through 2008 until inventories drop dramatically. Road construction and commercial are still fairly strong. Coal mining and quarries are steady. Parts and service business will need to carry us more than in the past few years and it will be very competitive."
From California: "Housing market has all but collapsed and we keep hearing promises of highway work - unfortunately, here in the central valley, the urgency to get projects [bid] is less than, say, in L.A. or Bay area; so we are really unsure of any market at this time."
From South Central: "Commercial is strong; export of used equipment is strong; housing is weakening, and highway is weakening due to funding decrease."
From Illinois: "All residential building is pretty tough right now and into 2008. The bright spot is commercial and small commercial building, which seems to be doing OK for now; but 2008 does not look as good from what we are told. As always it should be an interesting year to come."
From the Rockies: "Housing downturn has and will affect market opportunities. Surplus equipment is starting to erode profit points. New sales continue to decline; used sales as well as rentals are flat. [Prediction:] Trend downward 10 to 18 months; flat 18 to 24 months; recovery 24 to 30 months."
From North Carolina: "Current order book has never been higher."
From Ohio: (former AED Chairman Dale Leppo writes) "The residential market is very soft; but it is everywhere. So far, our commercial, industrial and institutional construction markets are holding up well and have offset the decline in residential construction. Will that continue in 2008? We think and hope so. We have concerns about 2009-10, but my crystal ball doesn't really work that far out.
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