At the onset of the COVID-19 pandemic in the U.S., equipment makers and distributors were in a good place. There had been some talk about the construction cycle peaking in 2020 and perhaps cooling off, but sales were strong and backlogs among contractors remained healthy. But as the pandemic stretches on, the effects of construction shutdowns, collapses in state and local revenues and a pullback in private construction have equipment manufacturers, distributors and suppliers facing tough choices.
Largely classified as an essential service, construction has kept going in most U.S. states and cities through the pandemic, but new projects are being delayed and preconstruction work has slowed on others. Bids are drying up, and with thinner backlogs, contractors and fleet managers are buying less iron.