As we approach the end of another year, many have begun to take stock of how they fared in 2017 and starting to look to the future. How did the construction industry as a whole do in 2017? What can we expect in the coming year? These topics will become the subject of the conversation as we continue to inch closer to 2018.
Much like any other business, construction has had peaks and valleys over the past few years. Having an adequate understanding of what has happened and a good idea of what is to come can help shape and inform a company’s direction and strategy moving forward. But what are those closest to the industry saying? What do contractors feel the coming months will bring? Once we know the answers to these questions, we’ll look at the best way to use this information to capture market share and stay competitive.
There are many things to consider when trying to gain a better grasp of the industry’s outlook. So, let’s take a look back at what happened over the past year and use the Equipment World 2017 Reader Profile to get a better idea of what contractors are saying about 2018.
How did the construction industry and the U.S. economy fare in 2017?
It’s important to note that this is not an exact science and projections can change. The economy itself and individual industries, such as construction, can frustrate prognosticators by under or over performing depending upon what happens in the national and global financial and economic landscapes.
To get a more accurate picture of what 2018 could turn out like, let’s look back at what has happened up to this point in 2017.
The State of the U.S. Economy in 2017
Overall the year can be viewed with a somewhat cautious optimism. The Federal Reserve’s semiannual report to Congress over the summer concluded that the economy continued to experience steady growth.
However, the growth has been slower than seen in past economic recoveries. With that slower recovery and subsequent growth has come lower than ideal levels of investment at a pace of 1% annual productivity growth. To put that in perspective, that’s only half the rate the U.S. saw from 1990-2004.
Even with the slower than expected growth rate, the economy itself is doing fairly well. Both the stock market and GDP continue to experience growth. The first half of 2017 was the strongest the American stock market has seen in quite some time. In addition, the U.S. GDP has also continued to see growth.
The GDP growth rate is expected to remain at an ideal growth rate of 2-3% moving forward. Any slower and the economy is dragging, any faster that 3% usually indicates an asset bubble that is bound to burst. While positive, the rate is slower than some would like. However, with no expected issues on the horizon with deflation or inflation, the economy should stay on the right track for the foreseeable future.
The State of the Construction Industry in 2017
The construction industry’s GDP reached an all time high in the first quarter of 2017 at $810.4 billion. Many within the industry entered the year with high expectations coming off a strong finish to 2016 and looking forward to shifting political and business waters as a new presidential administration took office.
Some of that optimism has now been dampened. Some of the more promising fiscal policies such as tax reform and increased infrastructure spending initially proposed by the Trump administration have thus far failed to be implemented. Even though all indications point to the growth continuing as we move forward, this has led to expectations for 2018 and beyond to be lowered.
Who are construction’s prospective buyers in 2018?
Though 2018 may end up being less profitable than originally forecast, the growth should continue. As with every year there will businesses looking to buy new equipment over the course of the year. Exactly what will these businesses be looking to before making a purchasing decision in 2018?
As it turns out, there’s a good portion already anticipating buying new equipment next year. With 21.2% of those surveyed in the Equipment World 2017 Reader Profile stating they are very likely to buy new equipment, and 13.1% saying they are very likely to buy used equipment.
Interestingly, over ⅓ of those surveyed cite an improving economy as a motivating factor for purchasing new equipment.
As noted earlier, though the expectations and projections have been lowered, the economy in general is still expected maintain positive growth. That economic growth could influence more construction purchases as we enter next year and beyond.
More equipment being purchased, whether new or used, and an improving economy with a strong stock market are all great signs for the construction industry moving forward. Nothing is guaranteed, but if the outlook continues to look good, where can these potential buyers be found?
How to reach the construction industry’s prospective buyers.
Referring back to the latest Equipment World Reader Profile, let’s take a look at where those in the construction industry tend to look for equipment and get their information. A huge segment, 77.1% of responders say they consult construction information resources to find the latest information on new products.
Half of those surveyed, cite websites as their top resource for detailed product information. While printed magazines continue to remain a valued resource, every year more and more are becoming comfortable with websites and online information as a valued source of product and company information.
You can use this knowledge to begin targeting prospective buyers online. With the wealth of information just a click away with EDA, it is possible to narrow down and pursue a precise target audience of your ideal customers.
As the economy continues to improve, with the GDP positioned in the ideal range, the hope is that many industries, construction included will have a great 2018. Get ahead of the curve . . . and competition by actively pursuing potential buyers now, so that when the time comes to make a purchase for the new year, you will be fresh in their mind.