Equipment rental in the United States is on the rise and more contractors and homeowners are renting equipment instead of spending more on new equipment or fleet purchases, says marketing information specialist and rental industry consultant Frank Manfredi.
Manfredi & Associates – based in Mundelein, Illinois – predicts in its 2013 Rental Industry Forecast that the U.S. equipment total will pass $32 billion this year, due in part to economic uncertainty in the USA and other parts of the world. The industry, which Manfredi has reported to be growing at a solid pace in 2011 and 2012, should expect a 16 percent rise this year, if the forecast is accurate.
The equipment rental industry is one economic area that actually benefits from uncertainty, Manfredi said in an RER Magazine article available online at https://tinyurl.com/aqxau34 . “Equipment users facing an uncertain future have turned to renting as a way to conserve cash. Renting is also an alternative for users who may be unable to obtain equipment purchase financing. The case for rentals is still strongest for equipment users that are utilizing their machines 50 percent of the time or less. Anyone who has a need for a production machine that is a primary tool in their fleet would be better off purchasing it.”
He added that emission regulations from the Environmental Protection Agency that went into effect a year ago had a positive effect on rental equipment utilization. Many machines built after 2011 are required to have more expensive Tier 4 interim engines, and higher purchase prices and uncertainty over performance and resale value have driven some businesses toward rentals.
Manfredi’s Rental Industry Forecast expects slow growth for the U.S. economy as a whole, an improving housing market, ongoing “high levels of demand from the energy sector” and manufacturers showing “improving non-residential construction investment.” It expects equipment sales to grow 5.4 percent over 2012 numbers, although that comes with a condition. “We expect the sales slowdown that began in the second half of 2012 to extend into the first half of 2013, with most 2013 growth occurring in the second half,” said Manfredi.