Every year, Wells Fargo Equipment Finance conducts the Construction Industry Forecast, a survey of construction industry distributors’ and contractors’ predictions regarding the upcoming year.
This year, the numbers communicated a more positive projection than had been seen in 20 years. In Part 1, our Tampa construction lawyers explained the nature of the survey and how the data should be interpreted. Today in Part 2, we will discuss the remarkable Optimism Quotient (OQ) of 133, and how some of the positive projections are already proving true. In Part 3, we will analyze industry concerns, link the official report and webcast, and provide resources for the future.
A High Optimism Quotient for 2018
The OQ for 2018 came in at a very strong 133. Not only has it leapt up 10 points from 2017 and a full 25 points since 2016, but it is also the highest measurement seen in 20 years.
Analysts believe that industry expansion and a rise in net profits are at the heart of this increased optimism for 2018. Some statistics from the report include the following:
- 92 percent of respondents expect that their net profits will remain the same or increase
- Of that 92 percent, 61 percent foresee a moderate or significant increase
- 76 percent of executives have a positive two-year outlook concerning industry growth
- 73 percent of contractors named expansion as the most likely scenario in the next two years
- 19 percent said that growth will remain static, which is an increase from last year
“It’s exciting to see this level of optimism. It reflects what we have heard from our customers about the strength of the market. Many industry participants feel that this could be one of their best years ever,” said John Crum, senior vice president and national sales manager of the construction group at Wells Fargo Equipment Finance.
A Promising Start
Not only were construction professionals’ levels of optimism high enough to culminate in an OQ of 133, but some of that optimism has already started to prove accurate. For example, contractor equipment rentals are already up compared to last year.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.