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Great American Group Sees Mixed Results for Heavy Mobile Equipment

May 31, 2013, 07:02 AM
Filed Under: Industry News

According to analysts with Great American Group, slower than anticipated economic growth has impacted freight delivery across the country. Rolling stock and intermodal equipment demand has been flat in recent months, however analysts remain optimistic about future potential gains.

"Expectations are for freight delivery, and thus freight car demand, to pick up starting in 2014 and carry on through 2018," said Michael Petruski, executive vice president of Great American Group's Advisory and Valuations Services division and heavy mobile equipment (HME) industry specialist.

The demand for new and used freight cars has declined slightly, and forecasts indicate that demand will remain somewhat lackluster through 2013 before picking up in 2014. Similarly, although sales for new class 8 tractors have experienced year-over-year declines, sales have rebounded from the levels witnessed at the end of 2012 and have increased month-over-month since February. Although fleet operators and end-users have been delaying equipment purchases recently, new class 8 tractor orders have increased year-over-year the past two months as operators look to upgrade their aging fleets.

Used construction equipment demand has remained fairly steady in recent months after small declines through the second half of 2012. "Reduced lead times for new construction equipment, as well as diminished demand in the sector, led to lower demand in the secondary marketplace for these assets from mid-2012 through the end of the year," noted Mr. Petruski.

An improvement in new housing starts, continued strength in the oil and gas sector and continued infrastructure spending has bolstered demand in recent months and expectations are for this trend to continue for the foreseeable future.

Great American Group's latest informative quarterly Heavy Mobile Equipment Monitor is here.

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