by Clay Eubanks, President at Takeuchi-US
Personally, I like to keep an eye on the industry. But it is a lot more pleasant to do when things are headed in the right direction. We are inching closer to 2017, but the equipment industry looks strong and steady to finish off the year.
State of the Construction Industry
According to the Associated General Contractors of America, construction employment totaled over 6.6 million at the mid-year point. In addition, the Bureau of Labor Statistics (BLS) reported that the national construction unemployment rate is at 4.5 percent, the industry’s lowest since October 2006. In total, construction added 215,000 jobs since this time last year, a 3.3 percent increase.
Additionally, the Associated Builders and Contractors state that nonresidential construction was the strongest sector in July, adding 11,500 net new jobs. This puts nonresidential at over 90,000 jobs since July 2015. Residential construction saw a slight increase in July, but overall has a net increase of just over 120,000 jobs since this time last year.
Housing is what really drives our sales. As more houses are built, the need for schools, hospitals and shopping centers also grows. Residential construction is a big strength for our economy now and is looking solid with continued growth in the forecast. The housing sector is on pace for 1.16 million housing starts this year, a forecasted 1.28 million next year, and 1.36 million in 2018. The housing market in the U.S. is on schedule to have its best year since 2006 and is forecasted to improve even further in the next two years.
Compact Equipment: Market Watch
Off-Highway Research projects that the North American market should rise by 4 percent this year to nearly 200,000 machines. Compact equipment contributes much of this growth.
Construction Equipment magazine reports that the compact construction equipment industry has shown a double-digit growth rate over the past two years. Track loaders have the largest equipment market share.
In addition, Compact Equipment magazine found that 36,000 skid steers were sold in 2015, slightly down 800 units from 2014. On the other hand, more than 40,000 track loaders sold last year, representing an interesting shift in demand.
Like track loaders, compact excavators continue to gain traction. The compact excavator category has already surpassed expectations this year with over 25,000 sold leading up to the last few months of the year.
The numbers are reassuring and there is good reason to be cautiously optimistic right now. This momentum is not just reflected in the North America market, either. Several other countries are feeling it too. Things feel as stable as they have ever been and all signs point to that upward trend continuing.
Contractors are busy. Dealers are busy. Rental houses are busy. Manufacturers are busy. These are all good signs of an improving economy.
There is plenty of work to be done and that is a great thing. Stay safe out there and thank you for your continued support.