When we look into our crystal ball for 2008, the image we see is brighter than many expected just a few months ago. Since contractors make up a large portion of your customer base, what affects them has direct impact on your livelihood. While there are many variables that continue to threaten the health of the construction industry, including a declining housing market and volatile oil prices, most contractors believe there will plenty of business to go around this year, and that's good news for us in rental.
According to the 2008 Wells Fargo Construction Industry Forecast, there is enough to be optimistic about. A total of 913 American construction industry executives were surveyed for this study, and while many are wary about the future, close to three quarters of contractors expect at least as many chances to bid on jobs in 2008 as in 2007. Many equipment distributors say they expect improvements in commercial and industrial sectors.
Specifically to rental, the study indicates that contractors are expanding their use of rented equipment. While 81% of contractors' equipment needs will be met with equipment they own, the number expecting to rent or lease equipment in 2008 is slightly higher than in 2007 (19% vs. 14%). What will they be renting? The 2008 study suggests that excavating equipment will be a hot ticket. Almost twice as many survey participants expect to rent excavating equipment in 2008 as in 2007.
Also encouraging is that of all the rental sources available to contractors, the majority (68%) use rental companies. A total of 14% of rental needs are met by distributors, 8% from other contractors and 10% from "other sources."
According to the 2008 Wells Fargo Construction Industry Forecast, the national "Optimism Quotient" slipped six points this year, from 86 to 80, revealing construction executives' cautious or measured optimism about construction activity in their local areas. And while technically, the "OQ" has slipped a bit, it is still quite high. And many contractors (28%) believe conditions are right for construction activity to grow in 2008. In their view, according to the survey, a stronger economy, more building opportunities and population growth will drive more activity.
We know that contractors are not your only customers and results from this survey deal only with that segment, but if you take a look at other indicators - or "crystal balls" - being mentioned throughout the industry, there is a general consensus of guarded optimism. Despite the threats facing our economy, there is good reason to be hopeful that there will be plenty of business to go around this year. So make the most of it. Capitalize on opportunities that come your way. After all, success isn't granted, it's taken.