San Antonio - Ahead of the Curve
48 Construction Equipment Distribution www.cedmag.com January 2010 Local Market When you meet San Antonio dealers at the AED Summit, they won't be celebrating. But the truth of the matter is that equipment dealers in many other areas of the country would rather be in their shoes. Yes, equipment sales are down in the nation's seventh largest city, and down dramatically over the past year new machine sales are off 66 percent over the past year, according to one dealer. However, compared to other major metro markets, San Antonio's has actually fared well. San Antonio lost 1,100 construction jobs from October 2008 to 2009, a 2 percent loss of jobs that placed it 16th in the most recent (October) Associated General Contractors of America (AGC) analysis of metro-politan area employment data using Bureau of Labor Statistics. Only five states showed positive job growth. Any dealer that is in Texas is fortunate, because Texas is better off than a lot of states, said Bennett Closer, AED's 2009 chairman and president of Closner Equipment Co., based in Schertz, Texas. That is not to say it is not a significant challenge. The downturn hit San Antonio later than it hit a lot of other markets. And with strong government spending and a diverse economy, the hope among deal-ers is that it will recover sooner as well. As in other markets across the country, the downturn in San Antonio has been deeper and longer than any other downturns they can remember. With this particular downturn we experienced a decrease across the board: Parts, service and machine sales, said Shane Brownlow, general manager of RDO Equipment Co. in San Antonio and Laredo, Texas. In '05, '06 '07 and half of '08 there was so much iron being purchased that people got flooded with it. Contrac-tors had excess iron sitting on the yard, because they had the jobs to use them. Now they don't have to spend money getting their stuff fixed. It sits. Closner concurs. They weren't buying new equipment and they weren't using the equipment they had, said Closner. They were parking it because they didn't have any work. We were off the mark on that. We thought there would be a huge increase in parts and service. That is not what happened. The rental market also took a hit. According to Brownlow, backhoes that typically rented for $1,500 a month can now be rented for $700 or $800 a month. And he believes there won't be an uptick in sales until the rental pricing returns to market value. San Antonio Ahead of the Curve By joAnne coStin (continued on page 50) the construction market in San Antonio has fared better than most, thanks to government spending and a diverse economy.