ROSLYN HEIGHTS, NY – Repossessions of construction equipment dropped by 53 percent during the four quarters of 2004, according to Nassau Asset Management?s NasTrac Quarterly Index (NQI). When averaging all four quarters, the annual volume of construction repossessions was down 6 percent compared with 2003.
?Nassau?s repossessions index shows that construction companies were able to honor their lease and loan commitments at a much higher rate in 2004,? says Ed Castagna, senior executive vice president of Nassau, who will speak at the Construction Industry Roundtable session Feb. 15 during the Equipment Leasing Association?s (ELA) Equipment Management Conference in Tucson, Arizona.
?The trend provides yet another economic indicator that construction spending has strengthened considerably in the past year and should continue to do so in 2005,? Castagna says.
Nassau?s findings correlate with CIT Equipment Finance?s 2005 Construction Industry Forecast that surveys U.S. construction executives, he adds. The survey recently reported that contractors plan to double their spending on new equipment this year. Likewise, 54 percent of equipment distributors expect to sell more new equipment this year than they did in 2004.
4th Quarter Surge in Repo Values
Despite an overall drop in the volume of construction equipment repossessions in 2004, the value of repossessed construction equipment actually rose during the 4th Quarter.
Castagna says more cranes and top-dollar equipment went on the block in 4th Quarter, as did equipment seized from smaller industry players squeezed out of business by larger companies. The result was a 131 percent increase in the value of construction equipment Nassau repossessed in 4th Quarter 2004 compared with 4th Quarter 2003.
About Nassau?s NQI
Each quarter, Nassau Asset Management releases its public NasTrac Quarterly Index on the top five repossessed capital assets. The index is based on the company?s internal records on liquidations. Results must be viewed over several quarters to establish long-term trends since all industries experience cyclical changes.
Nassau tracks many equipment types as a function of its nationwide remarketing operation, which liquidates all types of assets including trucks/trailers, buses, construction equipment, medical devices, machine tools, and woodworking equipment.
Finance companies and industry analysts can contract with Nassau to dig deeper into the numbers, determining the root causes for trends and researching specific equipment types. Companies can use their private reports to help mitigate risk in portfolios and/or provide useful economic indicators to their own clients.
About Nassau
Nassau Asset Management of Roslyn Heights, NY, has been providing full service asset management for more than 25 years to the equipment leasing and finance industry. Areas of expertise include: large-scale, end-of-term fleet liquidations; full plant liquidations; asset recovery; collections; global remarketing; appraisals; legal services through a nationwide attorney network; and Nassau?s global remarketing Web Site, www.nasset.com.
