CIT Construction Forecast Shows Optimism for 2004

Dec 15, 2003 12:00 PM

CIT Equipment Finance, a unit of CIT Group, last week announced results of the 28th annual CIT Construction Industry Forecast. The 2004 outlook indicates that U.S. construction industry leaders are significantly more positive about the industry’s prospects than at any time since 1999. Of nine U.S. regions surveyed, eight showed double-digit improvements in optimism.

“The overall year-over-year growth in optimism was the most impressive in the 28-year history of the forecast as sentiment significantly rebounded from last year’s levels to figures not seen since 1999,” said Roy Keller, president CIT Equipment Finance. “This bodes well for the entire construction industry as the forecast has traditionally been a consistent and accurate predictor of what lies ahead.”

The survey’s overall optimism quotient jumped 14 points – from last year’s 89 to 103 – the highest level since 2000, when the forecast accurately predicted a softening in the U.S. construction industry. The optimism quotient for contractors and distributors rose 13 and 16 points, respectively. Additionally, the optimism quotient in six of nine U.S. regions rose 14 points or more.

The survey showed that as equipment rental fleets grow older, more contractors continue to find it necessary to use rental equipment to back up the equipment they own. Twenty percent of non-builders said covering for equipment that breaks down is one of their top reasons for renting – twice as many cited breakdowns as a reason last year.

Competition with large equipment-rental companies is becoming the norm for distributors. Seventy-six percent say they compete directly with rental companies, up from 71 percent last year. This year, 86 percent of distributors with light-equipment rental business said they had competition from rental outlets – an increase of 21 percent in just one year.

CIT Equipment Finance, Livingston, N.J. and New York, N.Y., is one of North America’s leading providers of financial services to the construction industry.