Construction equipment market weakens

INDEPENDENCE, Ohio – Survey results released last week show that national demand for rental construction equipment has weakened since July, according to Longbow Research, an Ohio-based independent research firm.
Of those surveyed, just 29 percent said their demand improved in August, compared with a reported demand increase of 35 percent in July.
And in August, 48 percent of construction-rental firms reported decreased pricing for their contracts. Only 35 percent had reported decreased pricing in July.
“The August survey results continue to suggest a difficult near-term outlook for the construction rental equipment sector, consistent with our outlook for 2008 demand for construction equipment continuing to be weak,” Longbow analyst Eli Lustgarten said in a statement.
Lustgarten also offered future insight, saying that the outlook for the next 9 to 12 months “remains cautious.” Positive expectations for the coming year were at 54 percent during the May-to-June period, but fell to 44 percent in July. Longbow revised that to a 42-percent positive expectation in August.
“We remain cautious on all construction equipment manufacturers and would also be wary of rental companies,” Lustgarten wrote, citing Caterpillar, Cummins, Deere and Ingersoll Rand.
Based in Independence, Ohio, Longbow Securities has provided research services to institutional investors, investment advisers and professional money managers since its 2003 founding. For additional information, visit www.longbowresearch.com.