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Home » Newsletter » Spring 2013 Issue 5

State of the Industry 2013
Clay Eubanks, President

In the last edition of the e-Newsletter I thought back on 2012 — it was a very good year for Takeuchi and the industries and customers that we serve. We were fortunate enough to expand our footprint here in North America with several new and innovative products, and to grow our distribution network with new partnerships throughout the U.S. and Canada. All of this was done, and continues to be done, in order for us to better serve our customers. Now that 2013 is in full-swing, I wanted to share with you my thoughts on the coming months, and share some interesting economic data that we’ve seen in the first quarter of 2013.

Rental Industry Growth

In early February, the Takeuchi team headed out to Las Vegas, Nevada to attend The Rental Show 2013 to officially introduce our new TS Series Skid Steer Loaders. As a former American Rental Association (ARA) board member, I have attended this show for many years, and it is always a good indicator of the position of the rental industry. On the first day of the show, ARA introduced their new Rental Penetration Index, which is an interesting mix of rental-specific data and market metrics used to measure the amount of equipment that is rented as a percentage of total construction equipment that is active in the market. The analysis revealed that rental equipment accounts for over 50% of the overall construction equipment market! This was fascinating news, but should come as no surprise, given that the rental market has continued its growth pattern even through the downturn.

Housing Recovery

Another bit of good news came in January when it was reported that construction spending on single-family homes showed a 30.2% year-over-year increase from January 2012. Building permits were 35% up in the same time period. This lasting surge in home building lead to further growth through February and March, and we are now seeing home building at its highest point in 4 years. This recovery in housing will likely offset any decline in total construction spending for both Takeuchi dealers and rental customers.

New Equipment Sales Increasing

While rental remains a critical segment of the construction equipment market, there is also a growth trend in the purchasing of new financed construction equipment. An increase in new equipment sales is a positive indicator for the construction industry, as it shows that contractors are getting to a point where they are able to once again make investments in capital equipment to grow their businesses.

According to data released from Equipment Data Associates (EDA), January 2013 new financed construction equipment sales show a 32% year-over-year increase from January 2012 figures. The data indicated a year-over-year increase for used equipment sales as well, showing a 5 percent year-over-year increase in January 2013.

Construction Employment Re-emerging

The recovery remains fragile in many ways, but overall, we are starting to see construction employment re-emerge from a tough 6-year decline. A recent analysis of Labor Department data by the Associated General Contractors of America (AGC) indicated that construction employment expanded in two-thirds of all states in the U.S. in January 2013 — the strongest growth being in Texas, California, and Washington.

This, of course, is good news, but industry leaders remain cautiously optimistic, as potential federal budget cuts to infrastructure programs could possibly threaten construction employment in many states. But the real good news is that with steady growth in rental and sales, our customers and the industries that we serve are poised for another good year.

Now, let’s all get to work.

~

The New TS Series Skid Steer Loaders

At The Rental Show 2013 in Las Vegas Nevada, Takeuchi US introduced the all-new TS Series skid steer loaders.

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Building Lasting Relationships

In this video, Chris Green, founder of C. Green Contractor Inc. in Des Moines, IA, explains the importance of building lasting business partnerships.