By Alexander Moschina
Suffice it to say that the last two years have taken their toll on commercial building construction.
In 2010, spending on nonresidential projects dropped 23%. And today, the majority of permits issued are for renovations, rather than expensive new ventures.
But according to Jim Haughey, Director of Research at Reed Construction Data, the market will pick up very soon…
“Spending will rise 2% in 2011 and will be expanding at a 15% annual pace by the end of the year.”
One Wisconsin crane manufacturer is already reporting a major surge in business. And the news has sent its shares soaring…
Manitowoc’s Crane Business Hits Pre-Recession Levels
On February 1, when Manitowoc Company (NYSE: MTW) reported a 12% rise in net sales for its crane segment, shares shot up by more than 27%.
CEO Glen Tellock said it’s an encouraging sign that customers “are beginning to replenish their inventories.”
For the quarter, crane orders rose by a whopping 70%. And those new orders will ultimately equate to $615 million in revenue, according to Robert Baird & Co.
It was the company’s strongest total since the third quarter of 2008. But it’s only the start…
Foreigners Want a Piece of Manitowoc
Manitowoc’s business isn’t just booming in the United States… it’s thriving overseas, too.
The company provides equipment in developing nations across Asia, Latin America and the Middle East. And unlike the United States, these emerging markets have shown an increase in demand for construction equipment over the past year. In fact, construction equipment sales abroad are expected to rise by 11% in 2011. And with operations in more than 20 countries, Manitowoc is well-diversified and in an excellent position to profit as the global economy recovers.
If the company can harness even a fraction of the growth that one of its larger competitors, Caterpillar (NYSE: CAT), has enjoyed, it will be in fine shape. In 2010, Caterpillar focused on Asia and nearly quadrupled its profits. If Manitowoc zeroes in on this growing market, too, it could reap similar rewards.
Regardless, though, Manitowoc is clearly performing well. After all, it beat majority of analysts’ expectations in the recent quarter. And so far this year, shares are up more than 47%.
As noted in its earnings release, the next 11 months will still be a transitional period for Manitowoc, as it emerges from the harsh recession. But if the current numbers are anything to go by, it looks like it’s doing so in stronger shape than ever.
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