Heavy equipment rental is an industry tied closely to a number of others, so its fortunes depend strongly on theirs. So it's good news that growth is predicted for heavy equipment rental companies over the next four years. Here's what's behind the recent industry upswing, and how companies can encourage more growth.
Breaking Records
The overall projections are great news for rental companies. The second half of 2016 is expected to see 4.9% growth to hit $47.6 billion in the United States alone. In 2017, that rate is expected to hold and the year to end with $49.8 billion. That's especially good to hear after a so-so first half of the year. The rental equipment industry is growing at twice the rate of GDP, surprising many analysts.
A Stronger Dollar
Heavy equipment depends heavily on how much you get for a dollar across the world. The stronger the dollar gets, the more expensive it gets for companies overseas to buy American equipment, and the more expensive renting equipment becomes as a result. Keep in mind, that as the dollar becomes stronger, other currencies can become weaker, which might have an impact on international construction.
Rental companies can offset this by asking international customers what their price concerns are and being sensitive to them. Shifting currencies are a common problem for companies that rent internationally, so many of them will likely have plans in place for their branch offices. If you're planning on going international, though, it's worth keeping in mind.
Canada's Construction Market
A major question mark in the rental industry going forward will be the strength of Canada's economy. Canada's economy is seen as turning around, after previous projections had it struggling over the next few years. It will be growing at a rate of around 4% per year between 2016 and 2020.
The Canadian construction industry still has issues to address, as spending has generally been weak and kept down rental equipment industry revenue in the country. But residential and non-residential construction is expected to recover throughout 2016, and Canada will be a strong driver in the future.
Watching The Future
The main question with any sort of long-term projection is asking just how well it will hold. Unexpected events, ranging from a change in interest rates to a sudden boom in a handful of industries, can alter industry projections in an instant. While industry experts anticipating long-term growth is heartening for any business to hear, it's fair to ask just how accurate it can be.
So the best guide, for your business, is to keep an eye on local growth and local conditions, and to constantly be searching for new opportunities. Growth can come from surprising places, as industries from oil drillers to national parks may find themselves needing to rent heavy machinery. The larger trends of an industry are crucial for any business, but we should never forget that trends don't turn into leads by themselves.
If you're looking for more leads and more opportunities, contact us. We'll help you find customers in your area you might never locate otherwise.
