My dad is an upstate New York General Contractor. He doesn't
own a huge fleet of equipment, but he does own one deuce-and-a-half flat-bed
truck, several one-ton pick-ups, two compressors, a Lull, and enough electrical
and cordless tools to fill your average hardware store. As a general rule,
quite a bit of my dad's annual budget goes into the purchasing of new tools and
equipment for the firm. According to him, you simply can't run an efficient
commercial outfit without the right equipment.
But lately my dad's been holding off on buying new tools.
Instead of buying new trucks every three years, which is his usual practice,
he's decided to opt for repairing his existing vehicles rather than put out the
cash for new. Why? He's still feeling the ill economic effects of the
recession, and it just makes good economic sense to hold onto the cash you have
already stored in the bank. Because who knows if you'll have work just a couple
of month down the road.
Repairing equipment rather buying new seems to be the
general trend across the globe, which is a boon to parts suppliers. Says Arne
Ruud of Guy Atkinson Construction LLC out of Broomfield,
Colorado, who until recently was used to
spending up to $10 million on new equipment annually, "In some of our areas the
markets have just disintegrated," ENR.
Construction online. "That doesn't give you a lot of confidence to go out
and buy new iron."
But according to some heavy equipment analysts, the "Band-Aid
approach" to maintaining your equipment can only last for so long before
repairing rather than buying is no longer cost effective. What's this mean? It
means that this year in the United States
alone, sales of new equipment are expected to increase by 11.6 percent. Owners
and operators like my dad will have no choice but to buy new in order to stay
competitive in the market.
As a contractor, do you foresee yourself purchasing new
equipment in 2011? Or will you spend another thrifty year maintaining and
Band-Aiding what you already own?
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