GE Capital's recent national survey of more than 400 fleet executives finds optimism in the upper echelons. Most of the companies surveyed are predicting improved revenues for the coming 12-month period, and a majority of the firms expressed confidence in their local economies as well as the U.S. economy as a whole. Nearly half of the respondents says they add workers to the payroll in the same time frame.
About two-thirds of executives at these middle market companies ($10 million - $1 billion in sales) with responsibility for their company’s vehicle fleets, say their firms saw improved overall performance (65%) and improved financial performance (69%) compared to the same period a year ago.
The fleets surveyed come from a variety of industries, including food & beverage, automotive, construction/contractors, healthcare services & healthcare products, retail, telecom & media and trucking. Average revenue of firms surveyed that operate vehicle fleets was $191,790,000. The surveyed fleets employ an average 1,439 workers.
The Fleet Market Economic Outlook Survey also found that 27% of companies expect to increase the size of their fleets in the next 12 months, while 50% of said they see some expansion ahead in the industry served by their companies.
Just over half of companies with fleets (51%) expect fleet costs to increase this year; very few expect costs to decrease. The largest increases in fleet-related costs in the past year were in the areas of fuel and maintenance (especially the upkeep of older vehicles and unscheduled repairs), the survey found. On top of that, the fleet executives surveyed said their capital expenditures are expected to grow in 2014 by an average of 39%.
As companies look for ways to maintain margins, many are considering AFVs to reduce the impact of rising fuel costs, but alternative fuel vehicles have yet to make a big impression on these privately held businesses. The survey revealed that only 4% of companies currently operate alternative fuel vehicles. Nearly half (48%) said they plan to add AFVs in the coming years. Of those companies, 64% plan on adding AFVs in the next two years, and 92% will add them within the next five years.
The most popular mode of obtaining new vehicles was leasing — cited by 30% of respondents, a bit more than using cash on hand (28%).
Overall, the survey showed fleet executives have more confidence in the economy than in past surveys, with 83% saying they were somewhat or very confident in their local economies; 65% expressed a similar sentiment regarding the U.S. economy. A healthy 42% of respondents expect to increase margins at their firms in the coming year.
Nearly half (48%) of companies surveyed say their firms will add workers with the year, with employment at these companies is expected to grow at an average rate of 3% year-over-year.
Looking at the year ahead, survey respondents were asked to name their top concerns. In order, they are; the cost of healthcare, the ability to maintain margins and the ability to continue to grow revenue.
For more information on fleet managers, visit gefleet.com.
More information on these and additional industries is available at gecapital.com/cxosurvey.