Nonresidential construction is on the upswing in the United States. The Associated Builders and Contractors reported on U.S. Department of Labor statistics that show it may be easier for professionals in the industry to find construction jobs. Nonresidential construction added 21,000 jobs in January, making up 47.7 percent of the total construction industry job gains during the month.
"Based on data regarding backlog, architectural billings and other leading indicators, the nonresidential construction outlook remains benign," said Anirban Basu, chief economist of the ABC.
The Outlook for Nonresidential Construction is Positive
Adding nonresidential jobs in January has caused many construction industry executives from across the U.S. to be more optimistic about the upcoming year. In fact, the "2014 Construction Industry Forecast" by Wells Fargo Equipment Finance, which polled more than 500 professionals, showed its Optimism Quotient - the main benchmark of the survey for measuring contractor and equipment distributor sentiment is at an all-time high. With a reading of 124, 18 points higher than 2013's reading and a vast increase from 42 in 2009, the quotient demonstrates nonresidential construction activity is expected to improve throughout the year.
In addition to the positive Optimism Quotient reading, more contractors are investing in or renting equipment construction equipment. More than 90 percent of respondents expect to rent in 2014, while roughly one-quarter plan to increase their purchases this year. Nearly two-third of distributors are anticipating higher sales numbers in 2014 compared to last year.
"The strong sense of optimism about construction activity is a natural contributor to the upward trends in construction equipment acquisition and rental we expect to see in 2014," said John Crum, senior vice president and national sales manager of the Construction Group at Wells Fargo Equipment Finance. "In fact, unit counts of light and heavy construction equipment sold in the U.S. correspond quite well with the curve of the Optimism Quotient over the last 10 years."
Equipment Purchases on the Web are Growing in Popularity
In the past, many contractors were hesitant to buy or rent their equipment via the Internet without trying it out first. But now, times are changing and companies are getting more comfortable browsing the Web for the things they need to complete projects. According to the Wells Fargo Equipment Finance survey, one-fifth of contractors have bought equipment on the Internet without inspecting it first, and nearly 70 percent of these professionals said they are satisfied with their purchases.
While many construction companies are embracing the idea of buying equipment over the Internet, a majority of these purchases are for less expensive items. The study showed of the 20 percent of contractors who bought online, 4 in 5 completed transactions totaling less than $250,000. With construction companies use the Web to buy products, materials, vehicles and machinery they need, it may become easier for nonresidential construction firms to compete for more projects and put themselves in a position to have a stronger 2014.