Issue link: http://read.dmtmag.com/i/96778
Markets ("Las Vegas Revs Up for a Comeback" continued from page 30) percent of our business was construction and 50 percent mining," he said. "That has completely changed. Today, a significant part of our business is mining related, while construction is making a slow, but steady increase." As gold prices have risen, so too has the activity in the mining sector. Pack expects construction spending within the mines to top $500 million this year as companies such as Newmont Mining and Barrick Gold build leach pads, dams, tailings, roads, and other infrastructure. "That's bigger than our highway program," said Pack. "Many of the guys that used to build highways are working in the mines." Mining machines are big ticket items. Cashman Equipment and Caterpillar recently sold three rope shovels to Allied Nevada Gold Corp. that can cost upward of $30 million each. To better serve its mining customers, Cashman Equipment invested in a $20 million expansion of its Elko, Nev., service facilities, which will be open by the end of the year. Other dealers haven't had the luxury of a diversified customer base – an alternative is to diversify geographically. For example, APCO Equipment, a single-location dealer in North Las Vegas that represents Link-Belt, Kubota, Kawasaki, and Wacker among others, has its fortunes tied to the local construction market, in particular highways and housing. After dropping from 65 employees to 19 since the peak, the company's president, Dallas Moyer, says they're ready to expand again; but not in Las Vegas yet. The company will soon be opening a second branch, 1,300 miles away, in Willingston, N.D., where the oil and gas boom promises opportunity. Lessons Learned from the Great Recession APCO Equipment and Cashman Equipment survived because they did what they had to do. They cut to where the business could support itself. "I have been doing this for 32 years and I have never experienced anything like the recession we had here in Vegas," said Moyer. "We had to A Cat 795F AC Electric Drive Haul Truck works in Northern Nevada. Mining accounts for a growing portion of Cashman Equipment's business. 32 | www.cedmag.com | Construction Equipment Distribution | December 2012 lay off a lot of people, and it hurt." Early action helped dealers weather the storm. "We were very aggressive with cost control structure when we first saw signs that the market was dipping," said Pack. "We shed inventory quicker than most and streamlined every department." "We are careful to run a diversified business," Pack added. "Even within mining, we like to be diversified. Even if gold takes a major dive, we still have a mining business in place." Cashman Equipment stresses the cyclical nature of their business to all of its employees. "We want to run this business, whether we are on the uptick or the downtick, the same way," said Pack. "We know a recession is coming, we just don't know when." The New Economy "I think we finally hit bottom," said Moyer, "but I feel what we see here in Vegas is what we've got." He's not expecting any kind of boom. While things may not come roaring back, Las Vegas dealers are seeing improvements. Leading the way is the housing market. "It is true we are building houses now in Las Vegas," said Pack. "There are new subdivisions going in. There are subdivisions that were on hold that are now returning." AGC statistics back up dealer observations. Through September, building permits for single-family homes are up 56 percent versus 2011. Annual new home starts are up 46 percent over Q3 2011. Positive annual job growth is one reason for the uptick. From January to September 2012, 5,100 jobs were added to the Las Vegas economy. According to Metrostudy.com, big gains in leisure services, education, health, and retail trade have offset losses in construction, real estate and government. Overall employment is up nearly 2 percent from January. Pack explained how cash investors are making it impossible for people to purchase a short sale, a lenderapproved sale for less than the principal balance. A recent article in the Las Vegas Journal reported that cash buyers accounted for 54.1 percent of October home sales. Real (continued on page 34)