Issue link: https://read.dmtmag.com/i/255289
February 2014 | Construction Equipment Distribution | www.cedmag.com | 41 Regions The biggest risks for the end of 2014 that will affect us going forward are: The world economy and the govern- ment funding for highways. Once we have a better picture of these scenarios we can then anticipate slow growth and optimism for the first part of 2014. We remain in need of stronger economic indicators: housing growth, government revenue growth, or strong nonresidential and highway construc- tion to sustain the previous growth percentages in unit deliveries. (continued on next page) Midwest U.S. Iowa Busts Loose with Surprise Year-end Purchasing BRUCE BOWMAN AED Regional Director President, Star Equipment, Ltd., Des Moines, Iowa The Midwest region has once again surprised me in how good a yearend can be. We were slow in whole good sales until November and December. Customers simply didn't buy if they didn't need it. They have indicated that they waited to buy until they knew they were going to have work for 2014. Earlier, I had reported a slow climb for this year, however I do not see it as slow as I did originally. North and South Dakota continue to do well, as does Wisconsin – all three states providing goods and services to the gas, oil and mining sectors. Some states are still waiting on the pipeline approval to start work, or in some cases they may be betting on it for the future. Iowa housing starts continue to climb upward. Farm and ag-related purchases from the farmer have slowed down and may be signaling an end to the ag equipment boom. Iowa crops have been bad this year but better than originally feared. Some encouragement can come from the yields being better than hoped for, but at the moment the price of corn is down substantially in a state that uses an incredible amount of corn. Illinois, Indiana and some of Ohio are perking up with recycling continuing to run well; and some road construction and expansion of high- ways in Ohio. But Kansas and Missouri have some trouble getting road construction on the road, so to speak. As for Michigan and Northern Ohio, well, I don't know what to say. It appears they are still struggling, but one person I talked to in Toledo said "things are starting to move a bit and all is right with the bank." Here in Iowa, we couldn't be happier with the close of 2013. We are above pre-train-wreck sales, and margins are holding. I sense margins will fall in 2014 mainly because the used equipment is drying up and becoming harder to get. We are also holding rental fleet longer than before, primarily because rental rates have not kept pace with the increase cost of Tier-4 Interim and Tier-4 Final equipment. I believe more new equipment will sell as a result of this, and it's simply harder to hide profit on new equipment over used and rental fleet, where no one really knows what you have paid for it. St. Louis Market Housing Makes a Comeback, But It's Hard to Raise Rental Rates GREGG ERB AED At-Large Director President/Sales Manager, Erb Equipment Co. Inc., St. Louis, Mo. As the construction industry continues on an upward path through- out most of our trade area there are signs the economy appears to be bottoming out or even showing some signs of recovery. However, the St. Louis market remains sluggish. Most contractors have viewed the construction market conditions as "better or much better" over the past six months. But there are still concerns about the rising cost of construction materials and the uncertainty in health care costs. This has created hesitancy in the market place to invest in new and used equipment. As the contractors move forward and the economy recovers the views are mixed as to when we will see a full