NEW ORLEANS, La. – Contractors may be cautious about new equipment purchases due to the economic decline, but that’s good news for rental stores, which supply many common landscape machines. And, according to a study by the American Rental Association (ARA), contractors are boosting rental market sales.
“The contractor segment of the rental industry showed modest growth in many areas of the country despite the overall economic downturn,” said Chris Wehrman, the ARA’s executive vice president and chief executive officer.
An ARA survey of members conducted late in 2001 found that 42 percent of stores specializing in contractor rentals saw an increase in their business during the last half of 2001. Thirty-one percent of stores that provide tools and equipment for both homeowners and contractors also reported that the contractor rental portion of their businesses had increased.
“Even with interest rates at near 40-year lows, contractors are finding that renting equipment, especially equipment they use intermittently, is more cost effective than buying it,” said Kyle Cole, owner, Iberia Rental Service, New Iberia, La. “Renting gives contractors a way to cut costs by paying only for the time they use the equipment.”
ARA members identified backhoes, mini-excavators, endloaders, lift equipment and trenchers as products most often rented by contractors. Several members cited increased utility work, such as installing fiber-optic cable, as a factor.
Contractor and industrial rentals represent the largest segment of the rental industry in North America, accounting for nearly 60 percent of the estimated $15 to $20 billion in annual rental revenue.
“The construction industry demonstrated remarkable resiliency during the fourth quarter of 2001, and is well positioned for growth this year,” Wehrman noted. “This bodes well for rental firms that serve contractors.”