While some dealers see some positive in overall market conditions, for most it remains tough sledding, according to the results of the most recent ‘Dealer Sentiments & Business Conditions Update” survey. Here’s a summary of the survey results:
• Dealers reported sales were down 12% on average in February, softer than the 11% sales decline in January. A net 14% of dealers missed their sales budgets for the month.
• Orders for the month were reported down 15% year-over-year on average, a deterioration from the 12% average order decline in both December and January.
• Dealers are now expecting sales to decline 15% for the full year on average, down from the 11% decline forecast last month."
• A net 37% of dealers report new inventory as “too high” compared to a net 34% last month, consistent with the last 4-month trend. However, a net 44% of dealers reported used equipment inventory as “too high” this month, above the net 41% level last month and the highest level in our survey history.
Here are some of the more interesting comments offered by dealers this month:
“My shortline manufacturers are still living in the fantasyland that there is a never-ending demand for their product. And dealers should order more, expect less from the manufacturer, and pay for it sooner.”
“They started out the year trying to hold the line on incentives and reduce them. Lasted about 2 months and now we are back in the same game as before with discounts changing and increasing almostdaily.”
“Most of the farmers are repairing rather than replacing.”
“We are less optimistic to date due to the fact in this area we are anticipating some weather related decrease as we have much less snow cover than in recent history resulting in some pessimistic outlook by our producers. Cost increases also are a large factor in this scenario because of manufacturer hefty price increases and the pressure from the Canadian dollar.”
“The only shining star will be the beef/livestock folks.”
“Right now outlook is less optimistic but a lot of factors could change things such as late spring, weather, yields, crop prices, etc. Earlier I was expecting a 5-8% increase for the year. Now, I feel I will be fortunate to sell what I did last year.”
“Reduced demand from cash crop growers, somewhat offset by cattle producers replacing mid-sized equipment. May also see some increase from hay producers.”