Farm equipment dealers continue to see good sales levels going into the last quarter of the year, but more are expecting softer sales in the new year, according to results of the November “Dealer Sentiments & Business Conditions Update” survey.
Ag Equipment Intelligence and Cleveland Research Co. conducted the survey in early November.
A net 15% of dealers reported better than expected sales results for October (32% “better than expected/above budget,” 51% “in line with expectations/on plan,” 17% “worse than expected/below budget”). The previous month’s reading was 8% who reported “better than expected” sales.
At the same time, dealers said year-over-year sales grew by 4% on average in October, which was in line with September.
When it comes to expectations for 2014, overall the dealers’ outlook calls for only a 1% sales increase for the year, which is up slightly from “flat” in the previous survey.
But when it comes to the dealers’ attitude about their prospects for next year, our Optimism Index remained in negative territory at –10% down from a –9% in the previous month. Some 15% of dealers were “more optimistic” in October, 60% said the outlook was about the “same,” while 25% said they were “less optimistic” than they were the previous month.
Two other factors emerged in the most recent dealer survey. For the third straight month new equipment inventories were rated “too high” by dealers following 12 straight months of new inventory “comfortable” or “too low.”
It also appears that pricing may be emerging as an issue for farmers, which is something we had not heard mentioned by dealers previously. Comments included: “Late model used equipment is slower to sell and more price sensitive” … “Pricing will be a factor. Not sure the buyer knows where the government is taking things (insurance, etc.)” … “Seems to be more interest in pricing going forward.”