Issue link: http://read.dmtmag.com/i/255289
40 | www.cedmag.com | Construction Equipment Distribution | February 2014 Regions ("Three's a Charm: Infrastructure, Energy, Housing Put the Rev In Revenue" continued from page 38) West/U.S. 'She said I can't go back to America soon So [goshdarn] cold it's gonna snow until June. Yeah, they're freezin' up in Buffalo stuck in their cars And I'm lyin' here 'neath the sun and the stars.' PATRICK MCCONNELL AED Regional Director President, Clyde/West, Inc., Portland, Ore. Well, the Northwest in January isn't exactly what Warren's distant cousin had in mind when he wrote "Mañana," but Portland is warmer than Atlanta today so we'll just have to make do. The Northwest economic climate is also fairly benign right now. Across the region the story is pretty similar: Employment is up, having risen steadily for more than three years now. In some metro areas employment is approaching levels set in the boom days of 2006-07. Personal income (real wages and salaries) has also climbed for three years in a row and is nearing the Q2 2007 peak. Unemployment continues to decline, although at a fraction under 8 percent it remains well above the 2007 figure of 5.3 percent. (And if labor force dropouts and discouraged workers are added back in, the picture is not as pleasant.) The percentage of home mortgages "under water" with negative equity has dropped to less than 10 percent – contrast that with the estimated 75 percent of negative equity mortgages in Nevada a couple of years ago. State general fund tax revenues are now at or above 2007 levels. (Although the state governments still do not have "enough" money – just ask them.) Forecasts and projections for coming years tell much the same story. The region's main economic drivers – agriculture, high tech, and manufacturing – are all doing very well. Boeing, in particular, has recovered from the delays and missteps of the 787 Dreamliner program, and now has an almost seven-year backlog of firm aircraft orders. Boeing also appears to be well on the way to reining in the demands of the IAM and other unions in exchange for building the 777-X in the Puget Sound region. Translating regional economic data into machinery business language, the story is much the same. Dealers are reporting solid growth mostly driven by replacement cycle purchasing and product support revenue increases. Reflecting the national and regional trends growth in the Northwest metro areas is more robust than in the outlying areas. But even in places like eastern Washington and southern Oregon the trend line is positive. Rocky Mountain U.S. Stay the Course, But Recovering Economy Needs Stronger Indicators JEFFREY SCOTT AED Regional Director President, Intermountain Bobcat, Salt Lake City, Utah To recap 2013 and to forecast 2014 would be one theme in the same – Stay the course, a steady path to growth. While unit sales of construction equipment are seeing year-over-year gains, the rental channel continues to be the clear leader in growth. Not only are national rental companies expand- ing their rental fleets, dealers are as well, and there has been a resurgence of the smaller local rental companies. Product support is growing as custom- ers are working hard and thus needing to repair and maintain their construc- tion equipment. Growth in the energy sector contin- ues as well as agriculture across the region; housing construction, as hous- ing starts grow, albeit conservatively but steadily. Although business is good in the recovering economy, our industry is never without its challenges: healthcare, Tier-4 engines, and regula- tory compliance. We are still a long way from the growth we need to consistently expand the economy and the sale of construction machinery. The lack of strong economic growth and expanding governmental programs is keeping the deficit growing at a trillion-dollar-a-year pace. The deficit problem is going to get worse unless programs are enacted that get the economy growing more rapidly.