A 17 Percent Gain is Good News


So far in 2011 the news I'm hearing from most rental people has been pretty good. I'm looking forward to taking the pulse of the industry at the Rental Show next week, where ARA is reporting increased registration, another good sign.

As some of you may have read in our January issue, 75 percent of the rental companies we surveyed said they expect 2011 to be a better year than 2010. While a bit of that can probably be attributed to the indomitable optimism of the human spirit, most that we talked to based it on the expectations their customers had. Their customers had reason to expect to be busier and that translated to those rental companies being busier as well.

And in fact that very survey indicated that 78 percent of respondents planned increased capex on fleet in 2011. I don't think anybody based those plans on hopeful optimism! No business owner in his right mind is going to go out and spend money based on hope. I sure wouldn't. They are spending partly because they have no choice but to replace aging fleet, but having, in most cases, just gone through a period of downsizing as well as aging fleet, they wouldn't be increasing fleet expenditures without good indications that the business environment would be better.

Another very positive indication comes from construction, distribution and rental industry expert Frank Manfredi who has been writing widely-quoted “size of the industry” articles every year in RER for quite a few years now. Manfredi, whose machineryoutlook.com newsletters are well worth checking out if you haven't already, writes in the February issue of RER that the total rental market for construction, earthmoving and access equipment will grow by 17 percent in 2011 to about $25.1 billion. Granted that comes from a pretty deep bottom with the rental industry totaling about $21.5 billion in 2010, down from a peak of about $37.6 billion in 2007, but still, up is up, and $25.2 billion looks better than $21.5 billion.

That doesn't necessarily automatically translate into a 17-percent increase for each of your businesses, but still there are much better things to look forward to in 2011 for most rental companies.

According to Manfredi, construction employment is a reliable indicator of rental activity. So keep a watchful eye for the arrival of February RER , which should be arriving in your mailbox any day now if it hasn't already, and check it out at www.rermag.com where it will soon be posted.

As for the upcoming Rental Show, myself and RER managing editor Brandey Smith will be posting our observations and impressions on twitter throughout the show, so be sure and check out our tweets at http://twitter.com/RERmagazine.

It should be more uplifting than it was last year.

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What's Rent Talk?

Rent Talk is the premier blog of Rental Equipment Register Magazine


Michael Roth

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a...

Gary Stansberry

Gary Stansberry is president of The Stansberry Firm LLC and specializes in business sales, fair market business valuations, operational consulting and positioning businesses to increase their value.
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