Rock to Road

News
Western Canada Construction – healthy or sick ?


November 5, 2008
By Andy Bateman

November 5, 2008 – An article by David Pett in yesterday’s Financial Post, “Wheels coming off equipment stocks,” quoted expert opinion on the prospects for construction equipment stocks.

November 5, 2008 –  An article by David Pett in yesterday’s
Financial Post, “Wheels coming off equipment stocks,” quoted expert opinion on the prospects for construction equipment stocks.

“Bank
of Montreal analyst Bert Powell believes the industry, like almost everything
else, has simply been hard hit by the threat of a recession in Canada, along
with falling commodity prices, which this sector depends on. Worse yet, Mr.
Powell sees little relief ahead. "We believe that the heavy equipment
industry fundamentals are challenged and there is a risk that market conditions
will deteriorate further," the analyst said in a report last week.
"Accordingly, we have revised [downward] our earnings estimates for our
heavy equipment coverage universe."

For
Canaccord Adams analyst Tom Varesh, the heavy equipment industry remains a
healthy sector, despite the hurt it has suffered of late. He reminded investors
that the sector will continue to benefit from the economic boom that has taken
place in Western Canada over the past decade.
"Furthermore, we posit that the construction industry in Western
Canada — with a solid pipeline of projects that extends out two
to three years — will need to rent and purchase construction equipment in
order to complete committed projects."”

Advertisment