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Making Capital Investments In Heavy Construction Equipment

 April 18, 2017  /  Comments Off on Making Capital Investments In Heavy Construction Equipment

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A lot of capital investment is needed for heavy construction equipment. Companies that opt to buy heavy construction equipment can look for used equipment that are on sale in the market. Such a move helps in various ways. Companies can get equipment that are as good as new at a cheaper cost compared to the cost in the showroom. Moreover, buying from the local market also reduces on transportation costs. Overheads such as transportation costs increase project costs and do not look good on the balance sheet.

Making Capital Investments In Heavy Construction Equipment

Financing the purchase of heavy construction equipment is a major concern. Companies search for financing options that offer low interest rates and a good bargain. The rate of economic growth determines external investments in developing countries. As has been proven time and again, a healthy growing economy attracts heavy foreign investments. In such an economy, given that there are increased financial inflows, interest rates tend to be low. You are, therefore, able to purchase or rent heavy construction equipment in an affordable and economical manner.

Thanks to the signing of the GATT agreement by most countries and subsequent opening up of markets, increased competition has led to a reduction in costs of acquiring heavy construction equipment. Moreover, this equipment is now being manufactured at multiple locations compared to before. As such, this trend has caught on across the world in a bid to serve global markets and to promote cross-country support for infrastructure development. Duty-free import structures are also on the increase across most economies to facilitate the acquisition of heavy construction equipment. For growing economies, development of local markets and an increase in exports is still necessary to support and facilitate the acquisition of such imports.

The demand for heavy construction equipment is region-specific in that markets are opening up at different rates. For example, in the U.S. and Western European markets, the need for development of new infrastructure is less compared to the need to upgrade the existing infrastructure. This is unlike in developing economies where new infrastructure development is currently underway so as to open their economies for international trade. Developed and developing economies will, therefore, invest differently in the acquisition of heavy construction equipment. They will also invest in very different and distinct types of heavy construction equipment as a result of this. Developing economies will focus their investment in heavy construction equipment for the development of roads, rail, flyovers, high-rise buildings and general urban development. As a result, such development in these economies calls for heavy capital investments in heavy construction equipment.

The largest manufacturers of heavy construction equipment are located in the U.S., Germany, Japan, France and the U.K. This is followed by countries like Italy, Canada, South Korea, Belgium and Sweden. China has also come up as a powerhouse in the construction of heavy construction equipment. Other locations for heavy equipment manufacturing are in Russia and Latin America. With time, more locations for manufacturing heavy construction equipment will come up across the globe.

For those who cannot afford to buy heavy construction equipment, renting is an option. Leasing can occur within domestic or international markets. If you need heavy construction equipment for a short or limited period of time, it makes economic sense to rent instead of buy. If you choose to purchase in such a scenario, you will have made a heavy investment in the purchase of the equipment only to sell it at a lower price after a using the equipment for a short time. Buying also comes with the burden of overheads such as maintenance and transportation of the equipment. Individuals and companies generally prefer to rent than buy such equipment. In the U.S, long-term leasing of such equipment is greatly preferred, especially due to the tax structure of the nation.

Written by Lindsey Rentals. Lindsey Rentals offers the best equipment rentals in Columbia, MO.

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  • Published: 1 month ago on April 18, 2017
  • Last Modified: April 19, 2017 @ 4:33 am
  • Filed Under: Business

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