CIT's 25th Annual Construction Industry Forecast Shows West North Central 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 West North Central region dropped seven points since last year, but of the seven regions reporting a decline in optimism, West North Central has posted the smallest decline. The region's 2001 OQ came in at 92, which ranks the region one point behind the national OQ of 93. The West North Central region, as defined by CIT Equipment Financing, includes Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

"An OQ index below 100 indicates a likelihood that construction activity will decline," explained Jerilyn Nicholsen, Vice President - Sales, CIT Equipment Financing. "The results of our study have shown this trend nationwide, and in particular, in the West North Central region of the country," she 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 distributors are more positive in their outlook than contractors, registering a score of 94 versus the contractors' 89.

"The West North Central region has the highest percentage of distributors in the $25 million or more category with 23% of area respondents, versus 16% nationally, so they are optimistic and with good reason," said Nicholsen.

Area distributors have also shown that they use the Internet on a regular basis for a wide variety of activities, such as selling equipment (60% in this region compared to the national average of 50%) and buying equipment (45% versus 30% across the country).

West North Central 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. 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 Nicholsen. "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