Heavy Metal: An Equipment Trend Report For 2012

heav equipment crane small business
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Two days ago, we talked about the Great American Group’s excellent Technology Monitor. Today we’re hitting on the equally excellent Heavy Mobile Equipment Monitor.

There’s a bit of duality here, as you might expect. The housing market remains sluggish and commercial construction is also sputtering, thanks to an economic recovery that has not been highly focused on either. Yet there’s a lot of good news to parse out, if you know where to look for it.

The State Of Heavy Mobile Equipment

If you’re looking at gas and oilfield equipment, cranes and railcars and a host of other equipment, things are going swimmingly:

The third quarter of 2011 saw the demand for rolling stock and intermodal equipment increase in significant ways. Class 8 tractors experienced a six-month high with regards to purchase orders as the demand for new equipment outpaces the available supply.

What’s most interesting here is that while house-building and new construction is still stagnant, the very equipment that’s needed to do all these things is in hot demand. It suggests a rubber band being pulled back, and it’s only a matter of time before the market gets hit in the head with a resounding thwack. In case that wasn’t clear—and it wasn’t—I expect construction to catch up very soon.

So as with technology, there’s optimism on the path ahead. Let’s take a look at a few trends.

The Trends

  • Railcars. They’re in huge demand as rail continues to be a relatively inexpensive, quick way to move product. The bad news? There’s an enormous manufacturing backlog because of that demand, and the industry’s growth in 2012 will be entirely tied up in how quickly these railcars can be produced.
  • Oil extraction. You’d be hard-pressed to find a more lucrative field at the moment. Demand for oil continues to go up and prices abroad are as unpredictable as ever, so the push for equipment to be used at home in the United States is skyrocketing. As with railcars, the only thing that can slow the gravy train is if manufacturing can’t keep up with the demand.
  • Housing and construction. As I’ve mentioned, this is the one field significantly lagging, and it should eventually catch up. The economy is on track to improve in 2012, and as a result we should see new construction go with it. Fingers crossed.

Does this match what you’re seeing out there in the world of mobile heavy equipment? Sound off!

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