According to the American Rental Association’s ARA Rental Market Monitor™ five-year forecast, which was updated prior to the holidays, total rental revenue in the American marketplace is anticipated to increase by 4.5 percent in 2018 to reach $51.5 billion, 5.5 percent in 2019, 4.9 percent in 2020 and 4.1 percent in 2021. This is exciting news for the rental marketplace and also bodes well for the non-residential construction and OTR industries.
According to Construction Business Owner magazine, the “projection is based on underlying economic fundamentals that drive construction business, which in turn drives rental of construction, industrial and general tool and light construction equipment.” These findings portend various take-aways for construction operators and business managers and, subsequently, for Carlisle™ dealers, OEMs and customers.
First, it points to the fact that the economics around equipment rentals are positive – exhibiting performance that nearly doubles the growth rate of the economy (something that’s expected to continue). These numbers also point to steady projections for gross domestic product (GDP) growth over the next several years in the American market of 2.3 percent in 2017, 2.7 percent in 2018 and 2.3 percent in 2019.
Growth of U.S. construction in 2017 is projected to be 5.9, with the top markets being mines and wells (72.1 percent); manufacturing (9.5 percent); commercial (7.0 percent); residential (4.3 percent); and public education (4.0 percent) – followed in lesser degrees by highways and streets, healthcare and public utilities.
According to Scott Hazelton with the industry intelligence firm HIS Markit, “job growth remains strong, GDP growth is solid, consumer confidence is high and housing continues to improve slowly, although construction spending has been flat.”
Second, tax reform could help to accelerate growth further – but its detailed potential impact, along with the wild card of infrastructure spending, present unknowns that could or could not have significant upside.
Third, the findings of the study indicate that renting continues to provide a more reliable option – for the construction, mining and other OTR-equipment dependent industries. In the wake of the 2008-2009 financial crisis, many operators turned to rental as a viable alternative. The financial climate at that time, along with the changes in equipment technology and specialization of equipment, have led to the continued increased desirability of renting. These trends rely on factors such as the notion that a fleet can be expanded or contracted as needed; access to the latest equipment that may be more safety standard compliant; an overall reduction in capital expenses for budget tight operations; access to equipment that is perhaps more readily maintained and also delivered on-site, etc.
All of the above generally create a scenario for the construction equipment marketplace that shows positive forward-looking growth and an outlook of health for the rental equipment market place overall – and this is all promising for the growth of polyurethane tire fill product applications.
Carlisle TyrFil™ – the most effective tire flatproofing solution in the world – is the industry’s market-leading polyurethane tire filling solution. TyrFil™ allows industrial vehicles to operate over broken glass, nails, sharp metal and rocks without the worry of flat tires. For years, the durability of TyrFil™ has been proven in thousands of industrial applications, most prominently in the mining and construction industries.
When speaking about the rental industry in general, John McClelland, chief economist, for the ARA, has noted: “People continue to realize the benefits of renting and how it can positively impact the bottom line. As a result, the equipment rental industry continues to outperform the general economy as well as the industries it serves.” A similar upside is true regarding the use of polyurethane tire fill – and the operators who opt for this reliable, eco-friendly solution (in place of solid apertures) that will help them to manage their bottom line more effectively, while also helping to better preserve their equipment and providing a smoother flatproofed ride that may reduce Whole Body Vibration exposure.
Overall, TyrFil™ is an economic and ergonomic win-win for operators – and the growth of this technology goes hand in hand with the healthy, sustained growth that the rental equipment sector has witnessed.
Here’s to saluting a strong 2018 economic outlook ahead for both of our industries!
To find a TyrFil™ dealer in your area, please visit us here.
[Article Sourcing: American Rental Market Monitor and Construction Business Owner Magazine]