Despite business improvements in the overall construction industry, contractors and equipment distributors expect the overall downturn in the construction industry to last at least until late 2013, according to the latest Construction Executive Survey from Wells Fargo Equipment Finance, part of Wells Fargo & Company (NYSE: WFC). Conducted in August, the quarterly survey recorded the responses of approximately 250 construction industry executives across the U.S.
“The survey results demonstrate some improvements in the construction industry over the past 12 months, but construction executives are clearly still cautious,” said John Crum, senior vice president and national sales manager of the Construction Group at Wells Fargo Equipment Finance, Inc. “Although the industry is still facing challenges, we expect to see modest improvements in the non-residential sector. At Wells Fargo, we are encouraged to see this year-over-year increase in activity and remain committed to serving our customers’ construction equipment financing and leasing needs.”
Highlights of the Q3-2012 Construction Executive Survey:
- Construction activity improved: Nearly half of construction executives (47.8%) said construction activity was “somewhat higher” or “much higher” than a year ago. In the 2011 survey, 38.4% said activity was higher and in 2010, only 28.5% said activity had improved over the previous year.
- But full recovery could take a while: Although executives acknowledge year-over-year improvement in construction activity, a full 61.0% said the downturn in the U.S. construction industry will not be over for at least another year. In the 2011 survey, that number was 82.2%.
- Job growth is tentative: 43.6% of the construction executives said their company is not hiring new employees within the next six months. While 41.0% said their company would hire some workers in the short term, 15.5% said they may or will have to reduce their workforce.
- Prices are rising: Four out of five respondents (80.5%) said they are seeing “somewhat higher” or “much higher” equipment prices compared to a year ago. More than 75% (76.2%) said that prices for materials are “somewhat higher” or “much higher” than a year ago.
The Q3-2012 Construction Executive Survey continues the longstanding practice by Wells Fargo Equipment Finance, Inc. and its predecessors to publish primary research findings for the construction industry.