The Upside of the Curve

Forecasting has been difficult the past couple of years as the country has wrestled with a recession, a terrorist attack on home territory, and a war that promises to stretch further than many had anticipated.

Our industry is affected by these new uncertainties, too, but it also has had to contend with a major piece of federal-funding legislation currently bogged in the mire that is Washington politics these days.

For most of our respondents, reauthorization of TEA-21 has caused all predictions to be hedged. From state agencies to highway/heavy contractors, the quick and adequate action of Congress would alleviate much of the doubt hanging over 2004.

Construction spending, overall, will creep up this year. As residential spending growth slows, heavy and nonresidential construction will pick up some of the slack.

Uplifting news near the end of last year also raised hopes that the nation's economy is coming out of the current downturn. As employment picks up, the upside of the curve should be more clearly obvious.

Jim Haughey, director of economics for Reed Business Information and Construction Equipment, highlights some hot and cold markets for the year on page 8 of this report.

Welcome to Construction Equipment/Case Construction Equipment's 2004 Annual Report & Forecast. Construction Equipment has reported on the state of the economy and the industry with these annual reports for more than 20 years.

Each year, the report has tapped the expertise of Construction Equipment's top construction economist for an overview of the nation's economic status. Then, we report on the largest exclusive survey in the industry of equipment owners and managers. The responses from these equipment users—including building and heavy contractors, material producers, mining and utility operations, and government-owned fleets—combined with those from rental dealers and equipment distributors provide the basis for this report on the outcome of 2003 and projections for 2004.

This year, we've partnered with two industry associations to further our understanding of the distribution and rental-dealer side of the industry. We extend thanks to The American Rental Association and to the Associated Equipment Distributors for letting us poll their members this year.

We mailed the survey in mid-September, so results provide an accurate look at the state of the industry. More than 11,000 questionnaires were mailed, with some 2,400 usable questionnaires returned for an overall response rate of 22 percent.

As in past years, we promised those who received our questionnaires, and especially those who responded, that we would publish the results for the benefit of the entire industry. This special report contains those results. To those whose participation made the 2004 Annual Report & Forecast a success, we thank you.

We also thank Case Construction Equipment, sponsors of the Annual Report & Forecast for the second straight year. Case is a full-line manufacturer of earthmoving equipment, and its support of this project has allowed us to publish substantial amounts of data and analysis for your use.