1. Which of the following best describes the replacement value of your construction equipment?
As indicated in the chart, almost all respondents (89.0 percent) can replace their construction equipment for less than $5 million. Once again, the single-greatest category of responses represents the smallest in terms of financial investment — under $500,000. Nationally, 57.3 percent of respondents could replace their equipment for under $500,000. These results are important in recognizing that the vast majority of respondents have a small (dollar-value) inventory of construction equipment. 2005 saw a greater number of smaller-inventory firms participating in the survey than in previous years; a trend noticed for several years.

2. What is your job title?
Presidents and owners of firms are likely respondents to the survey; their combined responses equal 55.5 percent of the total, remaining constant in comparison to last year's 53.1 percent of respondents. As was the case last year, this year managers throughout the organizations are responding to the survey. The 2006 survey presents organization-wide viewpoints of the coming year as managers throughout the organizations participate in the survey, with many of the respondents holding key management positions in their companies.

3. Which of the following best describes your authority to specify or approve the purchase of capital investment equipment for your firm?
Nationally, 89.4 percent of respondents either have sole approval authority or participate in approving capital investment equipment. The percentage of those who request or do not participate in the process is the smallest in recent years, 10.5 percent. The almost 90 percent of respondents who are responsible for approving expenditures speaks to the higher level of managers responding to this year's survey than in recent years.

4. Which of the following best indicates your firm's annual contract volume?
This year's respondent pool is distributed much like a bell curve. Annual contract volume in the under $500,000 category received 13.6 percent of responses; $500,000 to $1 million, 20.2 percent; $1 million to $5 million, 29.8 percent; $5 million to $10 million, 13.2 percent; and over $10 million, 23.2 percent of responses.

In the over-$10-million category, six years ago had 23.8 percent of responses in that bracket, five years ago only had 14.7 percent of respondents reporting annual contract volume of that magnitude, four years ago there was a slight increase to 15.3 percent of respondents, three years ago there was another slight increase to 18.8 percent, two years ago there was a significant increase to 31.8 percent, last year the number decreased to 24.4 percent of respondents, and this year 23.2 percent of respondents were in this category.

5. Which of the following statements best indicates your view of the 2006 construction market? Construction in MY market will...
...do very well, according to most respondents. This survey is the most optimistic in years.

Again this year there is a declining percentage of respondents predicting a decrease in the market. Four years ago, 28.1 percent of respondents predicted a decreasing market for 2002 (that survey immediately followed the events of 9/11), a jump from the 15.6 percent of the respondents nationally who said the market would decrease somewhat in 2001. Three years ago that percent fell to 21.4 percent, signaling a slow economic rebound for 2003. Two years ago, the number of respondents believing 2004 held a declining market decreased even further to 14 percent. Last year the respondents who viewed 2005 as a year of decrease further slipped to 10.7 percent. Respondents expecting a decline in 2006 represent an even smaller percentage, 8.4 percent.

Respondents this year are very optimistic for 2006. Almost 92 percent of respondents are expecting market stabilization or growth — 32.5 percent believe the market will remain stable, 37.7 percent believe it will increase some and 21.5 percent expect a significant increase.

6. What percent of your equipment does your company rent, lease and/or own?
For the last two years, the survey instrument allowed respondents the freedom of not having their responses equal 100 percent, so there is a slight understatement of answers this year. With that said, the trend still exists whereby respondents are increasing their renting of more equipment and owning of less equipment than in previous years. Three years ago, respondents reported renting 11 percent of their construction equipment, leasing 8 percent of their equipment and owning 81 percent of their equipment fleet. Two years ago, 15.1 percent of the fleet was rented, 8.3 percent leased and 76.6 percent owned. Last year, 21.5 percent of the fleet was rented, 10.0 percent leased and 80.6 percent owned (slight overstatement of responses). This year the trend continues — 18.8 percent of the fleet was rented, 6.8 percent was leased and 69.5 percent was owned (slight understatement of responses). From the survey three years ago to the survey this year, the percentage of fleets rented has increased from 11 percent to 18.8 percent and the percentage of fleets owned has decreased from 81 percent to 69.5 percent. If the market experiences the optimistic gains expected by respondents, it would follow that next year's survey would show an increase in equipment ownership. As the market strengthens, contractors tend to own more of their equipment.

7. What percent of your equipment fleet do you purchase new and/or used?
As in the previous question, responses added to less than 100 percent. Decreasing from last year's 63.9 percent, this year respondents report that 55.1 percent of their equipment is purchased new and 33.9 percent is bought as used equipment. It is interesting that the percentage of equipment purchased new has started to decrease. Perhaps with the expected increase in market growth next year, this trend will reverse itself and next year more contractors will report a higher percentage of equipment purchased new, a trend that was growing before this year's responses.

8. What equipment does your firm plan to acquire in 2006? (May indicate more than one response.)
Respondents are planning to acquire an assortment of equipment in 2006. Thirty-six pieces of equipment were included in the survey and all pieces were listed as planned acquisitions for 2006. Respondents were asked to check which pieces of equipment they plan to acquire in 2006 and indicate whether the equipment would be rented or bought. The 17 pieces of equipment listed in the accompanying chart are representative of the top 10 rent and purchase options listed by respondents. There are 17 pieces of equipment listed rather than 10 because not each piece of equipment fell within the top 10 for each category. The list of the equipment includes aerial work platforms, air compressors, backhoe loaders, walk-behind compactors, computers/software, concrete pumps*, hydraulic cranes, crawler dozers, hydraulic excavators, high-reach/rough-terrain forklifts, generators, lasers, pressure washers, flatbed trailers, heavy-duty trucks (over 26,000 GVW), light to medium trucks (to 26,000 GVW), and welding equipment. The piece of equipment followed by an asterisk (*) denotes equipment not mentioned in the top 10 lists from last year.

9. From what type of business do you acquire equipment? (May indicate more than one response.)
Based on the responses, companies use a wide array of businesses for purchasing equipment. The favorite every year has remained the dealer/distributor with a response of 80.2 percent. The second and third most-mentioned businesses are a rental chain and a used equipment dealer (37.4 percent and 31.3 percent, respectively). Equipment is also purchased from an auction company (23.3 percent), manufacturers' representatives (18.5 percent), other contractors (13.7 percent), and through a reseller (11.5 percent). This list, in order of most responses to least, closely matches the order of response percentages from previous surveys. This consistency through six years of data illustrates a fairly stable and established distribution chain for selling equipment to the construction professional.

10. Which of the following best describes your primary type of business? (May indicate more than one response.)
Most respondents identified their business as one of three categories — as general building construction (45.8 percent), as special trade contractor (21.6 percent) or highway and heavy construction (18.9 percent). Other contractor (7.9 percent) and other industry member (4.8 percent) help to round out the types of businesses surveyed. Very few respondents (0.9 percent) classify themselves as a construction material producer.

11. Which of the following best describes your primary type of work?
The top responses (greater than 10 percent) on a national level represent the key work-related job areas covered by respondents. The primary types of work include commercial building (31.3 percent), carpentry (26.0 percent), excavating/grading (23.3 percent), earthmoving (18.1 percent), water and/or sewer work (15.0 percent), demolition (13.7 percent), and electrical (11.5 percent). These categories coincide with the types of business respondents reported — general building, highway and heavy construction, and special trade contractors. Overall, the type of work done by the responding subscribers is varied and represents all aspects of the construction industry.

12. How far from your home office does your firm do the majority of its work?
Due to the local nature of the construction industry, it is not surprising that 71.8 percent of respondents work within 90 miles of their home office and another 13.2 percent work between 90 and 140 miles of their home office. Together, 85.0 percent of firms surveyed are working within a 140-mile radius. The remaining 15.0 percent of respondents work over 140 miles from their home office. These numbers are nearly identical to the last two year's results.

Reasons for the close proximity of firms to the field are diverse. Contractors understand the importance of maintaining and nurturing work relationships with customers, suppliers, dealers, employees, banks, and communities. Effectively maintaining these ties requires a presence close to the home office and most of the firms represented in the survey keep their business close to home.

13. How often do you conduct business on the Internet?
This year's majority of respondents report great proficiency with computers and the Internet, like respondents for the last two years. Using the computer for business daily are 50.7 percent of respondents. Intermediate use of two to three times a week is reported by 25.6 percent of respondents. Still surprising, 20.3 percent report infrequent use and 3.5 percent report never using the Internet for business purposes. Since the survey was only available online, it is interesting to note that even though all respondents are Internet equipped and users of the technology, there are still nearly a quarter of respondents who do not use the Internet regularly for business activity (compared to a third of respondents last year). For those construction professionals for whom the Internet is an integral part of their business, their use of the Internet is only going to grow; however, there continues to be a group for whom the Internet is not a business consideration. It is interesting to note that the group of non-users is shrinking (from roughly one-third last year to one-quarter this year), although it is perhaps not shrinking as quickly as expected considering that more and more business is conducted online each year.

14. Which business activities do you conduct online? (Respondents may indicate more than one response.)
When asked which activities are conducted online, respondents report using the Internet most often for e-mail (77.1 percent). Also of note is 71.4 percent of respondents report using the Internet for researching new equipment; the second year in a row that researching new equipment has ranked second, not far behind reported e-mail use. Other activities include research (insurance, 21.1 percent; used equipment, 52.0 percent; financing, 18.5 percent; rental, 32.2 percent; industry news, 47.6 percent; parts, 38.3 percent; suppliers, 45.8 percent; and service, 17.6 percent), visiting websites of other construction-related organizations (dealer websites, 56.8 percent; manufacturer websites, 70.0 percent; association websites, 43.2 percent; and magazine websites, 36.1 percent), checking equipment prices (41.0 percent), checking the weather (67.0 percent), and making travel arrangements (54.6 percent). Compared to last year, nearly all activities saw online use increase. For the last several years, the Internet has been used extensively for business and business-related purposes.

15. What do you purchase online? (Respondents may indicate more than one response.)
Online purchases are stabilizing in terms of percentages over the last two years. Last year, 22.2 percent reported no purchases; this year that number is 19.8 percent. New and used pieces of equipment are purchased online, but the percentage of respondents who do so has made yet another small increase to 16.7 percent and 19.4 percent, respectively. Still popular are purchases of parts (42.7 percent), supplies (53.3 percent), travel (45.4 percent), books (41.0 percent), and other goods and services (18.1 percent). With the exception of other goods and services, all other online purchases increased this year over last year's percentages.