Access equipment rental companies were cautiously optimistic during The Rental Show, held February 21-24, 2016 in Atlanta, Ga., says Chad Cochrane, General Manager of U.S. Markets Inc. (USM). Rental buyers of scissor lifts, boom lifts, and telescopic handlers continue to feel downward pressure on rental rates due to oversupply.
“As costs for new equipment keep increasing, many lift equipment fleet owners are turning to reconditioning to improve their utilization and ROI,” says Cochrane. USM expanded repair and reconditioning services in 2013 for scissor lifts, boom lifts, telescopic handlers, and carry deck cranes.
“Reconditioning is an economical option for many fleet owners. At a fraction of the cost of buying new, the life of older lifting equipment can often be extended by as much as five years,” said Mike Ferguson, Cleburne Facility Manager.
According to KeyBanc Capital Markets Inc., “We believe the pressure on [rental] rate predominantly stems from oversupply vs. weak demand, which, in our opinion, is a higher quality problem as fleet divestitures and reduced capex can help mitigate some of this pressure.”
Meanwhile, American Rental Association economists are forecasting continued construction growth through 2019. The equipment rental industry is poised for stable growth over the next few years, according to the latest forecast released by the American Rental Association (ARA), which calls for total rental revenue increases of 6.6 percent in 2016 and 5.6 percent in 2017.
The forecast reflects the downward shift of investment in energy markets and continued growth in residential and nonresidential construction. “There is no doubt that the secular shift to renting equipment continues in the markets those in the equipment rental industry serve. Many customers continue to take advantage of the benefits that equipment rental offers,” said Christine Wehrman, ARA’s CEO and executive vice president.
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