Work on the new—and the old

ROADS & BRIDGES’ 2001/2002 survey shows new purchases and continued maintenance

Cranes Article February 18, 2002
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This industry doesn’t surrender. But they’re not
afraid to give up on equipment, either.

The ROADS & BRIDGES 2001/2002 Truck and Highway-Heavy Equipment surveys show a business which enters the new year cautious but not panicked, attached but not possessive. In other words, users are still spending what it takes to update fleets despite hefty maintenance dollars.

New money is going toward equipment like aerial lifts,
cranes and milling machines. Still, the average highway-heavy equipment
maintenance expenditures for 2001 were over $1.2 million, while for trucks it
exceeded $545,000.

Our surveys reached a total of 4,000 (2,000 truck, 2,000
highway-heavy). On the truck side we achieved a 17.9% success rate, and on the
highway-heavy end 14.7% were returned.

The responders were the ones working the acquisitions. With
trucks, a solid 99.6% deal in one or more of the following areas: determine the
need; select the manufacturer or model; set specifications; authorize purchase;
or evaluate manufacturer or model. Over 84% were either an owner/executive or
supervisor/department head. With highway-heavy it reached 95.3% and over 80%
were from the top.

Our survey reached four primary groups: contractor;
municipality/township; state DOT; and county agency. 

Last time we checked

Last year, our Equipment Ownership Survey 2001 (EOS 2001)
revealed a 27% decrease (from 55% in 2000 to 28% in 2001) overall in the number
of respondents expecting to invest between $1 and $100,000 in new trucks. Only
8% of the respondents reported they expect to invest more than $1 million, and
39% of new trucks to be purchased in 2001 fell under the Class 1 ( GVW) category.

As far as expected increases or decreases in the amount of
money spent on new trucks in 2002, based on the money spent in 2001, 19% of the
respondents expect increases, 14% decreases and 56% expect their investments to
be unchanged.

In regards to the amount of money to be invested in new
construction equipment for 2001, the survey respondents results were: no
investment, 11%; up to $100,000, 14%; $100,000 - $300,000, 20%; $300,001 -
$500,000, 15%; $500,001 - $750,000, 8%; $750,001 - $1 million, 7%; greater than
$1 million, 15%.

The following is a 2001 truck and equipment survey results
breakdown.

>Contractors

According to the EOS 2001, the new equipment contractors
planned on purchasing in 2001 included asphalt pavers, asphalt/soil compactors
and mo-tor graders.

The statistics revealed that 23% ex-pected to invest between
$100,000 - $300,000 in new equipment in 2001. When comparing the amount of
money spent in 2000 on new equipment and the amount to be spent in 2001, 47% of
the respondents said this figure would remain the same. Contractors did
ex-press an interest in spending more rather than less in 2002—30%
expected an increase.

County agencies

Equipment trailers, motor graders, mowers and wheel loaders
led the pack of equipment that county agencies planned to purchase in 2001, and
approximately 49% of the respondents indicated they expected to invest between
$100,000 - $500,000 on new trucks. Thirty percent indicated they expected to
invest in that same figure range for new construction equipment in 2001.

Municipalities/townships

Forty-four percent of municipality/ township workers said
they expected to invest up to $300,000 for new trucks and construction
equipment in 2001.

State DOTs

Based on the EOS 2001 responses from state DOTs, 39%
expected their investments in new trucks in 2001 to remain unchanged from 2000.
As for 2002, 48% expected these same investment figures to remain un-changed as
well.

The state DOTs indicated the money they expected to invest
in new trucks was going to be the same, but it was noted that 15% said those
investments would be greater than $1 million in 2001.

Respondents indicated that for new construction equipment,
48% expected their investments in 2001 to remain unchanged from 2000.

An effective change-up

Our mailings were a little different this time around. We
surveyed the same time frame—2001-2002—but we delivered two
separate versions (truck and highway-heavy equipment) in the hopes of gathering
real numbers from the real players.

There also was a maintenance and rental angle. We wanted to
know how much a company, agency or department invests in maintenance (as
previously noted) and the role they play.

Workers were asked to check the following degree of
maintenance responsibility: use dealer for all maintenance; use dealer only for
major maintenance; perform major maintenance ourselves; and perform routine
maintenance ourselves. More than one category could apply, and it was
discovered highway-heavy equipment and trucks followed similar patterns.

Of the ones that were checked concerning highway-heavy
equipment, 44% fell in the perform routine maintenance ourselves category, 30%
in the dealer only for major maintenance and 22% went to the perform maintenance
ourselves category. For trucks it was 46%, 30% and 21%, respectively.

Turning to overall 2001 highway-heavy equipment purchasing,
milling machines/reclaimers ($406,888.89 av-erage purchase expenditure), cranes
($345,416.67), aerial platforms/lifts ($258,409.09) and concrete pavers
($243,333.33) were the top new ma-chine acquisitions in 2001. On the rental
end, cranes ($92,258.82 average rental expenditure), aerial platforms/lifts
($39,421.74) and milling machines/re-claimers ($22,819.05) were the leaders.

In 2002, respondents said they plan to increase new purchase
spending for milling machines/reclaimers; cranes; compactors; backhoe
loaders/wheel loaders; sweepers; trenchers; and mowers. Aerial platforms/lifts;
concrete pavers; bulldozers; excavators; and motor graders will take a cut.
However, respondents planned on increasing their rental budgets for asphalt
pavers; bulldozers; excavators; motor graders; mowers; trench-ers and skid
steers.

In the truck arena, Class 1, 2 (6,001 - 10,000 lb GVW), 5
(16,001 - 19,500 lb), 7 (20,001 - 33,000 lb) and 8 (>33,000 lb) showed
positive activity in 2001 and 2002.

The average number of Class 8s acquired in 2001 was 3.8. Of
those acquired, 83.3% were replacements and 15% were additions. Class 1
reported a 3.1 average (59.9% replacements, 20.8% additions), Class 5 2.5
(66.6% replacements, 33.3% additions), Class 7 2.4 (75.7% replacements, 24.2%
additions) and Class 2 2.3 (70% re-placements, 29.4% additions).

Class 8 is the leader for 2002 at 3.6-piece acquired average
(83.8% replacements, 9.8% additions), followed by Class 5 at 3.3 (64.2%
replacements, 35.8% additions), Class 7 at 2.9 (91.3% replacements, 8.7%
additions), Class 1 at 2.7 (89.6% replacements, 10.4% additions) and Class 2 at
2.3 (85.6% replacements, 14.4% additions).

Contractors

For the most part, contractors followed the norm. Milling
machines/ reclaimers ($521,428.57 average purchase expenditure); aerial
platforms/ lifts ($373,461.54); cranes ($370,000); concrete pavers ($292,000);
and bulldozers ($169,642) were new equipment needs in 2001. Cranes
($104,533.33); aerial platforms/lifts ($50,177.78); milling machines ($40,000);
bulldozers ($21,000) and backhoe loaders/ wheel loaders ($17,282.47) were hot
rental items.

Looking at 2002 purchasing, cranes are expected to receive
the biggest boost ($370,000 in 2001 to $510,000 in 2002), while aerial
platforms/lifts could suffer a significant cutback ($373,461.54 to $25,166.67).
Cranes, bulldozers, motor graders, aerial platforms/lifts and excavators will
remain strong in the rental yards.

Class 7 and 8 trucks should record significant gains this
year. Class 8 shows a 2.6 average number acquired (70.9% replacements, 29.1%
additions) in 2001 and a 5.2 average (94.3% replacements, 5.2% additions) in
’02. Indicators show a two-unit surge in Class 7, from 2.0 (65.3%
replacements, 34.7% additions) to 4.0 (96.4% replacements, 3.6% additions).

State DOT

The needs are a little different at the state DOT level,
where motor graders, bulldozers, backhoe loaders/wheel loaders, mowers and skid
steers recorded the most new purchases in 2001. Asphalt pavers, sweepers,
mowers and bulldozers were tops in the rental market.

But in 2002 sweepers, excavators and compactors lead the way
in purchasing, while mowers, bulldozers and as-phalt pavers should remain the
top borrowed items.

Class 7 and 8 trucks hold their superiority at the state
level. According to the response, the average number acquired was 23 for Class
8 trucks (100% replacements) and 13.5 for Class 7 (100% replacements). This
year, Class 8 and Class 7 are expected to jump to 39.25 (100% replacements) and
25.5 (100% replacements), respectively.

County

Motor graders are a wanted item at the county level. Those
surveyed said it was the top new purchase item in 2001 ($443,571.43 average
purchase expenditure) and ranked No. 2 in 2002 ($162,500), right below
excavators ($198,333.33).

Other new expenses in 2001 went toward aerial
platforms/lifts, sweepers, mowers, skid steers and backhoe loaders/wheel
loaders. Following excavators and motor graders this year are aerial
platforms/lifts, bulldozers, backhoe loaders/wheel loaders, mowers and skid
steers.

Rental activity was particularly slow in 2001—10
categories recorded zero dollars—and it’s even expected to
de-crease in 2002.

Class 1 trucks were rolling into county lots in 2001 (6.2
average number acquired), but that number recorded a drop in 2002 (2.0). Class
6 trucks raised from 1.5 last year to 4.0 this year.

Municipality/township

Municipality/township officials spent the most on aerial
platforms/lifts ($136,000 average purchase expenditure); sweepers ($96,750);
backhoe loaders/wheel loaders ($94,966.67); and motor graders ($75,000) last
year. Sales should continue to be strong for aerial platforms/lifts ($275,000);
backhoe loaders/wheel loaders ($128,416.67); motor graders ($120,000); and
sweepers ($99,666.67) in 2002.

Again, responders showed a decline in rental spending in
’02, with eight categories showing cuts.

Truck acquisitions were low in 2001—Class 8 and Class
1 showed a 1.9 average number acquired—and there isn’t significant
growth to report in 2002. Classes 2, 3 and 5 show an average number acquired of
2.0.

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