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Focus - Consider the rental option

image Tom Hubbell, Vice President of Marketing and Communications, American Rental Association

MOLINE, IL – Total equipment rental revenue growth in North America continued to more than triple the growth of the general economy with a 6 percent gain in the first quarter of 2014, according to the latest American Rental Association (ARA) forecast from the ARA Rental Market Monitor.

    The forecast projects total equipment rental revenue in North America to grow 7.5 percent in 2014 to reach $40.8 billion, 10.4 percent in 2015 to reach $45 billion and another 9.3 percent in 2016 to $49.2 billion. The growth rate is expected to be 7.7 percent in 2017 and 7.2 percent in 2018, with total revenue of $56.8 billion.
    In the U.S. alone, total rental revenue in 2014 is forecast to reach $35.9 billion, up 7.7 percent, led by an 8.2 percent increase in construction and industrial rental revenue and a 7.3 percent increase in general tool revenue.
    Both those segments are expected to hit double-digit growth in the U.S. in 2015 with construction and industrial revenue projected to increase 11.0 percent and general tool 13.2 percent, and again in 2016 with increases of 10.0 percent and 11.4 percent, respectively, with high single-digit growth expected in 2017 and 2018.
    Whether or not you have rented equipment before, rental companies today offer an attractive option to consider as construction work in Texas strengthens this year and shows growth in through 2018.
    Renting offers contractors and construction companies access to a wide variety of equipment for added job versatility without the added financial burden associated with the by-products of ownership, including the cost of expenses such as warranties, regular maintenance and repair, transportation, insurance and storage.
    Construction companies and contractors are paying closer attention to the bottom line more today than ever before.
    Rather than buying equipment, the American Rental Association (ARA) encourages construction companies and contractors to take a look at how the fixed cost of renting equipment keeps the burden of capital investment, maintenance and selling equipment on the rental business balance sheet instead of yours.
    Renting allows contractors and construction companies to take on a wide variety of jobs and projects that may require equipment that they don’t have the capital to purchase, as well as specialized equipment for seasonal or large jobs.
    To help contractors and construction companies determine whether renting a piece of equipment is the right decision, ARA suggests the following rules:
• Look at the cost of renting versus buying and consider the time value of money. Renting may be a better choice.
• Estimate the time utilization of a piece of equipment. If you are not going to utilize the equipment, why pay to own it? Consider renting.
• If your jobs are varied and require special equipment, consider renting.
• If your fleet’s diesel emissions are controlled by regulation, consider renting.
    Equipment rental company trained professionals also are available to help assess and secure the right equipment for the job at hand. Equipment rental inventory is turned regularly, providing later equipment models with the latest safety features, emissions controls and better fuel economy that meet current governmental requirements.
    The state of Texas has independent and national construction and general tool rental companies located throughout all regions of the state with inventory that meets local and statewide equipment needs.
    Finding equipment rental stores in Texas is easy by using the ARA’s online rental locator, www.RentalHQ.com. Users can enter their zip code and the type of equipment they are in need of to get a list of local rental companies that can help meet their needs. Equipment rental should be a part of your business decisions today and for the future.
    Top reasons to rent construction equipment:
1. Supplement basic equipment with specific rental equipment that extends your opportunity to compete for more jobs.
2. Reduced workload on equipment warranties, maintenance and upkeep on your end.
3. Eliminate warehouse or storage demands.
4. Have the right equipment to compete for the job successfully.
5. Equipment meets regulatory specifications for all types of construction jobs.
6. Less transportation expense on your part to transport equipment.
7. Less equipment inventory that requires disposal.
8. Eliminate equipment tax, license and registration issues.
9. Free up capital for other demands and a stronger balance sheet.
10. Offers a more cost-effective option all around.
     Christine Wehrman is CEO of the American Rental Association (ARA), the international trade association for the equipment rental industry. The ARA’s core purpose is to promote the success of its members and advance the growth of the equipment rental industry. ARA’s current membership includes nearly 9,000 rental businesses and nearly 1,000 manufacturers and suppliers. –cw

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Sue Johnson sjohnson@constructionnews.net