Rouse Services collects and analyses over US$20 billion in new and used equipment sales transactions annually. They share data and trends to customers through subscriptions and reports, including monthly construction updates, and quarterly crane and truck reports.
The following are excerpts from Rouse’s Q3 Crane Commentary Report:
“Nonresidential construction activity remained strong through Q3 2022, but the rate of increase has continued its trend of deceleration in recent months. The forward outlook, as measured by construction starts and the Architecture Billings Index, indicates a strong construction environment for the remainder of 2022 and into early 2023, but these metrics are less optimistic than they were earlier in the year.
In the current environment of high inflation and interest rates, some market participants are pressing pause and taking a wait and see approach. Nonresidential construction spending currently sits right in-line with levels observed in 2019.
Meanwhile, infrastructure and commercial construction projects have now fully recovered to pre-pandemic levels and sit right in-line with Q3 2019, after briefly outpacing these levels at the end of Q2. Similar to the Architecture Billings Index, the Dodge Momentum Index is a monthly measure of the initial report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. This index has been trending up through Q3 2022, led by commercial activity. The September 2022 Momentum Index of 183.2 is the highest level since the Great Recession and less than 5% below an all-time high.”
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Manitowoc market update
The quarterly report also includes commentary from crane manufacturers around the world:
“Manitowoc reported Q2 2022 sales of $497M, an increase of 7% over prior year’s Q2 sales. However, orders have begun to trend meaningfully downward from historically high levels, with Q2 2022 orders down nearly 20% compared to the prior year, but still above pre-pandemic levels. Additionally, as supply chain issues have eased in recent months and net new orders have slowed, the company’s backlog has begun to decrease after increasing each quarter since the initial onset of the pandemic.
Manitowoc has also noted that the overall global crane market is clearly slowing. Although their anecdotal surveys of customers noted crane activity is strong and rental rates are inching higher, inflation and rising interest rates have significantly tempered the momentum that had been building the previous 18 months.In the current environment of high inflation and financing costs (as noted by Manitowoc, for example), crane owners are hesitant to part with used cranes in fleet as the total replacement cost for a new crane currently sits at historically high levels. This low volume and soft pricing is likely an indication of a cautious environment when it comes to either shedding excess capacity or investing in additional capacity.”
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