CIT's 25th Annual Construction Industry Forecast Shows Middle Atlantic Region With Lower Optimism Quotient Than National Average.

Business Editors

LIVINGSTON, N.J.--(BUSINESS WIRE)--Nov. 14, 2000

Decline in U.S. Construction Market Activity Predicted for 2001

In the 25 years that CIT Equipment Financing has been forecasting the nation's construction activity, not all the news has been positive, and 2001, according to this commercial finance leader, will be no different.

CIT Equipment Financing today released the company's 25th annual Construction Industry Forecast which reports Optimism Quotients (OQs) for nine regions throughout the United States, as well as a national Optimism Quotient. This year the Middle Atlantic region has posted an OQ of 92, which represents a 10-point decrease from last year. The region only trails the national 93 OQ by one point. The Middle Atlantic region, as defined by CIT, consists of New Jersey, New York, and Pennsylvania.

"An OQ index below 100 indicates a likelihood that construction activity will decline," explained Charlie Lee, Vice President - Sales, CIT Equipment Financing. "The results of our study have shown this trend nationwide, and in particular, in the Middle Atlantic region of the country," he continued. "In the past few years, the construction industry has seen tremendous growth, reaching historically high levels that would be difficult to maintain long-term."

The Construction Industry Forecast annually predicts construction trends on both national and regional levels based on telephone interviews with more than 900 contractors and distributors throughout the United States.

Area contractors are much more positive than distributors, registering a score of 94 OQ compared to the distributors' 89.

"The unique thing about the Middle Atlantic region is that of the contractors who have predicted a decrease in non-residential activity, more of them blame a declining business cycle than the economy," said Lee.

While the contractors and distributors agree that the best source of industry information is colleagues or friends in the business, contractors in this region exceed the national average of executives using the Internet to get information.

"Middle Atlantic survey participants mirrored the concerns of construction professionals across the country, indicating that the most serious problem facing the industry is the lack of a quality workforce," said McGowan. Since 1998, contractors and distributors have expressed a concern that the competitive job market has caused the industry to accept workers who do not always have the training and skills necessary to get the job done.

"On a positive note, however, even in an environment of slowed activity, qualified construction professionals are gainfully employed," said McGowan "They have the continued opportunity to market themselves in any number of the industry's segments that are seeking such experienced personnel."

For the past 25 years, CIT's Construction Industry Forecast has been a reliable and respected barometer of what is in store for the construction industry in the coming year. CIT Equipment Financing provides equipment financing to the construction industry through a network of financial experts. The company serves middle market contractors and distributors, as well as national and regional manufacturers. CIT Equipment Financing is an operating unit of The CIT Group, Inc. (NYSE: CIT; TSE: CIT.U), the largest publicly owned commercial finance company in the world, with more than $54 billion in total management assets (http://www.cit.com).

Editors Note: To request a 2001 CIT booklet or CD-ROM, please e-mail [e-mail] or call 973-740-5466