Underground Rental Industry Shows Improving Conditions

By Jeff Griffin, Senior Editor | July 2011, Vol. 66 No. 7

Many involved in various construction markets continue to search for signs that the recession is truly nearing an end and better times are close at hand.

The equipment rental industry is considered by some -- including many in the underground utility construction market -- to be a key barometer of growth. Backhoe-loaders, trenchers, compact excavators, skid-steer loaders, air compressors, pumps and hand-held compactors and tampers all are widely used in underground construction and are staples of equipment rental centers. If rentals of these machines are increasing, the thinking goes, workloads must be increasing.

Growing demand for rental equipment also is good news for equipment manufacturers and dealers, hard hit by slumping sales.

The rental industry began recovering from the recession in late 2010, and the American Rental Association (ARA) is forecasting construction equipment rentals to increase nearly 7 percent in 2011, said Tom Hubbell, vice president of marketing and communications. ARA is an international trade association for equipment rental businesses and rental equipment suppliers and manufacturers.

Hubbell noted construction equipment rentals were down nearly 6 percent for the year 2010, but research showed revenue rose in the last quarter of the year. The good news continued into the new year.

Many consider ARA’s annual The Rental Show held each February as another indicator of the year to follow, and for them, the 2011 show was encouraging.

“It was a great show for the industry,” said Christine Wehrman, ARA executive vice president and CEO. “Show attendance was up nearly 40 percent, and buying activity on the exhibit floor was significantly up. Rental company attendees demonstrated they were at the show to buy equipment and strengthen their businesses -- updating and expanding fleets to ensure availability for customers.”

Rental growth
ARA research estimated a 5.1 percent growth in the first quarter of 2011, followed by 6.3 in the second quarter. “For the rest of 2011, we expect quarterly growth nearing 8 percent,” Hubbell said.

As mid-year approached, rental stores reported strong demand for seasonal lawn, garden and landscaping equipment, including trenchers, mini excavators and skid-steers, Hubbell said.

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