Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

KickerFeaturesTopicsCommercial LawSectionsNewsLJN Newsletters

Wells Fargo Survey Forecasts Non-Residential Construction Activity to Increase

By ALM Staff | Law Journal Newsletters |
February 28, 2012

According to a recent survey by Wells Fargo Equipment Finance Inc., construction contractors and equipment distributors are optimistic that local non-residential activity will improve in 2012. The company's 2012 Construction Industry Forecast, Wells Fargo's Construction Optimism Quotient (“OQ”) ' the survey's primary benchmark for measuring contractor and equipment distributor sentiment ' is at 114 for 2012, marking a material increase from 96 in 2011. An OQ over 100 is considered optimistic of year-over-year improvement in local non-residential construction activity.

Highlights of the 2012 Construction Industry Forecast:

  • The OQ of 114 is a strong indicator that the industry expects 2012 non-residential construction activity to improve from last year. The 2012 OQ exceeds the score of 109 recorded in 2005, near the height of the construction boom. After falling to an all-time low score of 42 in 2009, the OQ climbed to 66 in 2010 and 96 in 2011.
  • In spite of rising optimism over the last three years and strong optimism for 2012, industry executives remain cautious about the amount of available work to sustain the current number of non-residential construction contractors. About four in 10 respondents (41.7%) said they expect fewer contractors in their markets by the end of the year. Only 10.4% expect the number of contractors in their area to increase in 2012.
  • Equipment distributors are very optimistic. When asked about their forecast for new equipment sales, 73.3% said they expect to sell more in 2012 than in 2011, and zero respondents said they expect a decrease in new equipment sales. Optimism among construction equipment distributors was high with nearly six in 10 distributors (58.1%) expecting an increase in local non-residential construction activity. Only 1.5% said they expect that activity to decrease in 2012.
  • Contractors are less optimistic. While 18.3% of contractors said they expect to acquire more new equipment in 2012 than they acquired in 2011, 52% said they would acquire the same amount and 29.2% said they expect to buy less new equipment in the coming year. Some 40.3% of contractors said they expect non-residential construction activity to increase in the coming year; 47.3% expect the same level; and 12.4% said they expect non-residential activity levels to decrease.

This survey marks the 36th year in which Wells Fargo Equipment Finance, Inc. and its predecessors have published primary research findings for the infrastructure construction industry. Conducted between Jan. 4 and Jan. 15, 2012, the survey recorded the responses of 394 construction industry executives from across the United States. The full survey may be accessed at https://a248.e.akamai.net/f/248/41008/14d/ig.rsys3.net/responsysimages/wells/__RS_CP__/2012WellsFargoConstructionIndustryForecast_FINAL.pdf.

According to a recent survey by Wells Fargo Equipment Finance Inc., construction contractors and equipment distributors are optimistic that local non-residential activity will improve in 2012. The company's 2012 Construction Industry Forecast, Wells Fargo's Construction Optimism Quotient (“OQ”) ' the survey's primary benchmark for measuring contractor and equipment distributor sentiment ' is at 114 for 2012, marking a material increase from 96 in 2011. An OQ over 100 is considered optimistic of year-over-year improvement in local non-residential construction activity.

Highlights of the 2012 Construction Industry Forecast:

  • The OQ of 114 is a strong indicator that the industry expects 2012 non-residential construction activity to improve from last year. The 2012 OQ exceeds the score of 109 recorded in 2005, near the height of the construction boom. After falling to an all-time low score of 42 in 2009, the OQ climbed to 66 in 2010 and 96 in 2011.
  • In spite of rising optimism over the last three years and strong optimism for 2012, industry executives remain cautious about the amount of available work to sustain the current number of non-residential construction contractors. About four in 10 respondents (41.7%) said they expect fewer contractors in their markets by the end of the year. Only 10.4% expect the number of contractors in their area to increase in 2012.
  • Equipment distributors are very optimistic. When asked about their forecast for new equipment sales, 73.3% said they expect to sell more in 2012 than in 2011, and zero respondents said they expect a decrease in new equipment sales. Optimism among construction equipment distributors was high with nearly six in 10 distributors (58.1%) expecting an increase in local non-residential construction activity. Only 1.5% said they expect that activity to decrease in 2012.
  • Contractors are less optimistic. While 18.3% of contractors said they expect to acquire more new equipment in 2012 than they acquired in 2011, 52% said they would acquire the same amount and 29.2% said they expect to buy less new equipment in the coming year. Some 40.3% of contractors said they expect non-residential construction activity to increase in the coming year; 47.3% expect the same level; and 12.4% said they expect non-residential activity levels to decrease.

This survey marks the 36th year in which Wells Fargo Equipment Finance, Inc. and its predecessors have published primary research findings for the infrastructure construction industry. Conducted between Jan. 4 and Jan. 15, 2012, the survey recorded the responses of 394 construction industry executives from across the United States. The full survey may be accessed at https://a248.e.akamai.net/f/248/41008/14d/ig.rsys3.net/responsysimages/wells/__RS_CP__/2012WellsFargoConstructionIndustryForecast_FINAL.pdf.

Read These Next
COVID-19 and Lease Negotiations: Early Termination Provisions Image

During the COVID-19 pandemic, some tenants were able to negotiate termination agreements with their landlords. But even though a landlord may agree to terminate a lease to regain control of a defaulting tenant's space without costly and lengthy litigation, typically a defaulting tenant that otherwise has no contractual right to terminate its lease will be in a much weaker bargaining position with respect to the conditions for termination.

How Secure Is the AI System Your Law Firm Is Using? Image

What Law Firms Need to Know Before Trusting AI Systems with Confidential Information In a profession where confidentiality is paramount, failing to address AI security concerns could have disastrous consequences. It is vital that law firms and those in related industries ask the right questions about AI security to protect their clients and their reputation.

Generative AI and the 2024 Elections: Risks, Realities, and Lessons for Businesses Image

GenAI's ability to produce highly sophisticated and convincing content at a fraction of the previous cost has raised fears that it could amplify misinformation. The dissemination of fake audio, images and text could reshape how voters perceive candidates and parties. Businesses, too, face challenges in managing their reputations and navigating this new terrain of manipulated content.

Authentic Communications Today Increase Success for Value-Driven Clients Image

As the relationship between in-house and outside counsel continues to evolve, lawyers must continue to foster a client-first mindset, offer business-focused solutions, and embrace technology that helps deliver work faster and more efficiently.

Pleading Importation: ITC Decisions Highlight Need for Adequate Evidentiary Support Image

The International Trade Commission is empowered to block the importation into the United States of products that infringe U.S. intellectual property rights, In the past, the ITC generally instituted investigations without questioning the importation allegations in the complaint, however in several recent cases, the ITC declined to institute an investigation as to certain proposed respondents due to inadequate pleading of importation.