The final quarter of 2019 begins next week. Compared to Q1-Q3, Q4 is slated to see a dramatic increase in spending. Greater spending poses greater risk, and good stewardship demands high scrutiny of increased business expenditures. Awareness of market trends can help your company be a powerful innovator. Here are 3 things you should know in order to help your company finish the year strong.
While the construction industry in 2019 has experienced a 2.1% spending decline since 2018, infrastructure spending is on the rise. So far, 2019 has seen a 5.6% increase in infrastructure spending (Source: Wells Fargo Construction Industry Forecast 2019). Bridges, highways, water projects and waste projects are a few factors that are causing this increase.
While technology and innovation are continually changing the world we live in, the humans behind the technology are still vital. The construction industry is still noticing that there is a substantial lack of finding and hiring qualified workers.
In November of 2018, Kate Rodgers (reporter for CNBC) wrote an article about this very problem. The article, “Grappling with an acute labor shortage, the construction industry is being forced to get creative” discusses the job market in the construction industry and the necessity for qualified workers. Project Jumpstart is an apprenticeship program reviewed in this piece that is training workers for real life on the construction site. Programs like Project Jumpstart could go a long way in offering solutions for construction companies that are struggling to find the necessary workforce.
Wells Fargo issued their annual “Construction Industry Forecast,” in which industry executives were surveyed from 48 different states. The report concluded that 80% of contractors would rent heavy machinery in 2019. While the reason for renting was varied, 46% of respondents said that flexibility was the driving force for rental. In tandem with the goal of flexibility, 19% of contractors rated readily available equipment as the reason they choose to rent vs buy.
Another contributing factor to the 2.1% construction industry decline and a leading cause for concern in the construction industry in 2019 is an unstable political and economic climate on a local and global scale. Because of this instability and other factors, companies find renting equipment to be an attractive alternative to buying. A robust 93% of distributors believe the size of their rental fleet will increase or remain the same, with 58% of respondents saying that their fleet would increase in size. Good things are on the horizon for construction equipment rental.