A Rising Tide

When discussing the economy, it’s tempting to focus on kitchen-table issues — inflation, grocery and gasoline prices, rent and mortgage rates, and the overall cost of living. But past the impact to wallets and bank accounts, the state of the U.S. economy directly and deeply impacts the construction industry, including the lifting equipment segment.

While the country and building-related industries suffered a dramatic downturn during the height of the COVID-19 pandemic, construction has bounced back in a big way in the last few years.

The truth is that the current economy is booming, even though some parts may still feel shaky. According to Eric Van Nostrand, assistant secretary for economic policy at the U.S. Department of the Treasury, “American business investment is outperforming expectations in the post-pandemic expansion; businesses have invested $430 billion more this cycle than if investment followed historical patterns.”

The construction industry is seeing a lot of that investment.

“Factory building (construction for manufacturing) has contributed almost one third of business investment growth since the pandemic,” Van Nostrand adds. And continuing investment in hotels, apartments, airports, the energy sector, civic and transportation projects, ect. means that big things are on the horizon for the contractors that build them.

What’s Going Right For Lift Companies

Recent government initiatives including the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act have all contributed to robust growth and consumer spending in the construction arena. These blueprints for a renewed national focus on manufacturing, transportation and energy infrastructure have increased demand for construction equipment — including lifting equipment — and related services across the country, particularly in bigger cities.

There are gains in who runs that equipment, too. As the price of college tuition rises, more young people are gravitating toward careers in the trades. Add to this more state and government investment in workforce development programs, and you’ve got a recipe for increasing numbers of construction pros. This opens the door for lift companies to recruit new employees and raise a new generation of lift operators.

Global events are also creating new opportunities. Supply chain bottlenecks have mostly eased and increasing onshore production of strategic industries means more business investment and construction of high-tech manufacturing structures.

And don’t forget the greening of America — as private and government organizations promote sustainable construction, green building initiatives are taking the place of dated construction methods, giving rise to a whole new set of opportunities for lift companies to impact lives now and for generations to come.

What Could Improve

Inflation, though falling, is still high. Interest rates are right there with it. That increases material and project costs, and impacts financing, which can strain budgets and potentially slow down or even halt projects.

While the previous two years showed explosive growth for construction companies, 2024 has been a slightly tougher year for some. That said, “the sector is forecast to show signs of growth in 2025, as economic conditions improve,” says Alexander Jones, a data analyst focusing on commercial vehicles. “With the U.S. Infrastructure Bill supporting construction investment, and inflation expected to fall over the next couple of years, leading to a decrease in short-term interest rates, there are encouraging signs for a bounce back in 2025.”

Commercial real estate remains one of the biggest post-pandemic losers. As more people work from home than ever before, the need for big corporate buildings has fallen. This means fewer opportunities for commercial construction companies, and less demand for lifts in some formerly reliable locations and sectors. Then again, some locations are renovating vacant buildings from workspaces to living spaces, opening up a whole new avenue of growth.

There are some international challenges, too. It might be hard to imagine that geopolitical unrest could pose dangers to U.S. workers standing high atop boom lifts and scissor lifts in the country’s heartland, but what happens in Ukraine, Russia and the Middle East just might. Uncertainties in those high-risk areas will continue to impact the U.S. economy, and that could be good or bad for small to large domestic companies and their employees, depending on which ways the geopolitical winds blow.

Election 2024 Forecast: Pros or Woes for Lifting Equipment?

While no one can say what impact the results of the upcoming election will have on the country and the lifting industry in particular, there are some safer predictions in key areas.

• Legislation: Recent transformational legislation has grown the construction industry as a whole, and the priorities of a new administration will continue to drive changes. Just what types of changes remain to be seen, and who holds the top office will have an outsized say in new legislative efforts and what they mean for the construction sector.
• Environmental Goals and Regulations: If clean energy and sustainability trends continue, expect to see massive opportunities for lift companies on projects including insulation, lighting, HVAC and other efficiency upgrades to new and existing buildings. The number of new green builds and solar projects will continue to soar, too.
• Infrastructure Investment: If the new administration and Congress continue to prioritize and pass infrastructure projects, there’s likely to be sustained to increased demand for lifting equipment on residential and commercial jobsites.
• Economic Growth: Different administrations have vastly different ideas and policies for spending, borrowing, central banking and taxation. All of this impacts the overall economy, which will directly and indirectly affect construction and lift companies for the next four years and beyond.
• Emphasis on Trades: Will investment and interest in the building trades continue to grow? If so, consider that a good thing for lift companies on the labor front. More operators mean more opportunities for companies to provide services to a wider base of clients and grow their businesses.