John Deere's top executive says he sees signs of resurgence in construction and other industrial sectors despite a shaky economy.
During a visit to a Sand Springs dealership Tuesday, Samuel Allen, chairman and CEO of John Deere parent Deere & Co., said rental rates for equipment are steadily climbing from their lows of 2008 and 2009, a leading indicator that contractors are ready to buy.
"Construction is starting to make a comeback," he said.
Allen met with customers and addressed employees during his visit to the Yellowhouse Machinery Co. dealership. Yellowhouse purchased the business, formerly known as Keystone Equipment Co., in January.
Allen has been CEO of Moline, Ill.-based Deere since August 2009. As one of the world's largest equipment manufacturers, the company depends on the construction, road-building and agriculture sectors.
Equipment makers such as John Deere and Caterpillar Inc. are often bellwethers for the economy, and Allen said various industries are finally starting to resume making purchases.
"There's been good improvement this year and last year," he said. "Things are improving."
However, residential construction continues to struggle, with an annual pace of just 571,000 homes in August, according to federal data. Housing starts during the month were 5.7 percent below August 2010.
In Oklahoma, Allen said equipment sales have been sustained by strength in the oil and gas industry, a sector that has surged despite tough economic times.
Allen also noted that strong agricultural commodity prices are a boost to farming, even though high costs for supplies are squeezing margins.
"Farmers are concerned with fuel efficiency because it's so easy to measure how much fuel it takes to plow a field," he said. "And it's the same in construction, even though it's harder to measure."
He said fuel efficiency among John Deere tractors and equipment is improving with industry demands.
Most Popular Stories
- Criminal Investigation Opened Into James Foley's Death
- Koch Brothers Took Genes, Money in Different Directions
- Rocket Explodes During U.S. Test Flight
- Short-Term Loans Comes at a Heavy Price
- Is Diversity in the Eye of the Beholder?
- Apple Stock Bounces Back Big Time
- 'Mythbusters' Build Team Gets the Boot
- Jennifer Lopez Would Marry Again
- Florida Judge Rules in Favor of GOP Voter Map
- Investors Betting on ECB Stimulus Measures