Issue link: http://read.dmtmag.com/i/280096
40 | www.cedmag.com | Construction Equipment Distribution | March 2014 Forecast Each January, Wells Fargo Equipment Finance (WFEF) surveys construction industry executives to gather their insight into current busi- ness conditions and to measure their sentiment for construction activity in the coming year. The survey's primary metric for assessing respondents' senti- ment of local nonresidential construc- tion activity is called the Optimism Quotient (OQ) – it's a directional metric that compares perceptions for the coming year against the previous year. OQ scores above 100 are consid- ered highly optimistic. Scores between 75 and 100 are cautiously optimistic and scores below 75 are considered more pessimistic. After tumbling to an all-time low of 42 in January 2009, the OQ has climbed steadily and reached new high points in two of the last three years. For 2014, the OQ is an unquestionably positive 124 – the highest overall score in this metric's 19-year history. Executives overwhelm- ingly expressed anticipation that local nonresidential activity this year will increase compared to 2013. Construction equipment distribu- tors tend to be more optimistic than construction contractors, and that trend holds true once again for 2014. The OQ for distributors reached a new high of 133 and contractors tallied up at 113, which is still a strong indica- tor of directional improvement. This 20-point gap between contractors and distributors is the third widest gap in the history of the OQ. More than half of respondents New Construction Industry Optimism Quotient Reaches All-Time High Dealers are considerably more positive about 2014 than contractors, but the good vibes are nonetheless overwhelming throughout the construction industry. BY JOHN CRUM Source: Proprietary data collected by Wells Fargo Equipment Finance Construction Optimism Quotient hits record high for 2014 The Optimism Quotient is a very positive 124 – signifying that executives believe non-residential construction activity will improve compared to the prior year. After touching its all-time low of 42 in 2009, the OQ has steadily climbed and shown five years of positive momentum. 2014 marks an all-time high in the history of the survey. U.S. National Optimism Quotient (OQ) 124 0 25 1996 1997 1998 Pessimistic (0-75) Highly optimistic (100+) Cautiously optimistic (75-100) 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 50 75 100 125 150 114 96 106 109 103 89 88 93 102 104 105 96 95 102 86 80 42 66 Great Recession Economic recovery