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Focus - Cautiously Optimistic

image Brian P. McGuire, President and CEO, Associated Equipment Distributors, Schaumburg, IL

DALLAS/FT WORTH - Business is good on the construction equipment side of things according to AED members and most are optimistic about the future. However, we still face challenges. Many report business is up or at least consistent with last year, though margins remain slim.

 

 

 

 

    Hot button issues include what’s included in the tax reform bill (H.R.1) working its way through congress. While H.R. 1 has provisions beneficial to AED members, there are also some troubling portions. We are particularly concerned with Sec. 3303, which prevents the use of like-kind exchanges (LKE) for personal property starting in 2018. While the provision doesn’t apply to an exchange if (A) the property disposed of by the taxpayer in the exchange is disposed of on or before Dec. 31 2017, or (B) the property received by the taxpayer in the exchange is received on or before Dec. 31, 2017, eliminating personal property LKE from the tax code will create uncertainty and could detrimentally impact capital investments.
    One challenge facing the industry
includes lack of action on a federal infrastructure bill. Everyone in Washington says they want a long-term bill, but so far we’ve seen nothing. We are anxious for Congress to take responsibility for maintaining and
improving infrastructure, which are the backbone of our nation and a prime driver of jobs and the economy. This is one place Congress needs to be bold.
    Another constant challenge is workforce education and training. Finding technicians and employees in general in the construction industry is difficult. That’s why AED and the AED Foundation invest heavily in promoting our 32 Accredited Programs at colleges and universities across North America. Not all technicians are created equal. The AED Foundations Certified Technician Program allows technicians to earn a professional industry certification by successfully passing an online technical assessment. An AED Certification is widely considered to be the “Gold Standard” in the industry.
    Finally, as we all know, financial challenges continue to squeeze margins including the cost of equipment and labor and the cost of acquiring capital. AED members are dealing with this by getting leaner and making better use of technology.
    Speaking of technology, the emergence of telematics is a key shift in our industry. Telematics allow our members to stay ahead of the game in maintenance, which reduces down time. It also affords them the ability to properly utilize resources, thereby reducing idle time.
    Another major shift in our industry is the move from equipment sales to equipment rentals. This is partially due to the lack of a federal infrastructure bill. Our equipment is too valuable and construction firms don’t want to make large investment and have the equipment sit idle, so they rent it when they need it. Unfortunately, the risk is that when things really start to boom, they may not have the equipment they need.
    All in all, our industry remains a very rewarding place to work. Our members provide good paying jobs, in demand careers, and the opportunity for advancement. Plus the satisfaction that comes with building and rebuilding America and strengthening our economy.
    In closing, how do we remain successful? By educating our workforce, staying ahead of the technology curve, and investing in people and the communities we live and work in.  As an association, AED is committed to providing the tools necessary for our members to thrive.
    Associated Equipment Distributors (AED) is an international trade association representing companies involved in the distribution, rental and support of equipment used in construction, mining, forestry, power generation, agriculture and industrial applications. -cmw


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Carol Wiatrek meditor@constructionnews.net