I can't say I was gushing with optimism after interviewing about 50 people about their expectations for 2010 for this month's cover story. Some of the forecasts sounded like outtakes from “Bleak and Bleaker” but I asked people to be candid so we could present an honest assessment rather than happy talk for its own sake. Still, our interviewees offer a variety of opinions and some fascinating insights.
Given what we already know, that 2010 is looking much like 2009, a year most would like to forget, there are some positives ahead and reasons to be hopeful. To start with, take a look at our interview with Portland Cement Association chief economist Ed Sullivan on page 31. A lot of people have the word “economist” on their resume but not every one of them worked for such wide-ranging employers as the CIA, Ted Kennedy, Wharton Economics and Chase Manhattan Bank, and none other was named by the Chicago Federal Reserve as the most accurate forecaster regarding economic growth among 30 top economists two of the past three years.
Sullivan points out that while we shouldn't expect much growth this year, the fact that census officials predict the U.S. population to grow by 60 million between now and 2030, infrastructure growth is inevitable. And, as many experts have pointed out, the trend towards outsourcing and rental as a way of supplying equipment needs is indisputable. So yes, you're in the right business. And if you're not sure about that, ask Sumitomo Corp., which just invested about $50 million into Sunstate Equipment (see story page 16). Sumitomo didn't make that investment expecting a fast buck or because its officers like to play golf in Phoenix. They did it because they see it as a solid long-term business.
A lot of rental companies are investing in their communities in a positive way. Volvo Rents' “Color for a Cause” programs and its “Hard Hat Comedy Relief” programs that raise money and collect food for local food banks create a lot of good will. Many other rental companies, large and small, are active in charitable and community projects. I like what Harry Schneider of Allied Financial Solutions had to say about combining with other companies in our communities to “help turn the tide locally” as he put it. If we support our local economies, it could have a ripple effect that moves through the counties and states where we live, Schneider says. If we hire even one person back and encourage others to do the same, hundreds of people will find work. “We have to believe that it is up to us to move this whole process forward,” he says. (For the full interview with Schneider, visit http://rermag.com/trends_analysis/interviews/rer-interviews-allieds-schneider-122309/index.html).
Schneider also said what we do now will be the foundation for our future and we can apply that many different ways. It certainly can apply to getting your business through this year and preparing for the future by making sure your company and fleet are the right sizes for your current needs.
I like NES Rentals' promise to donate money to the Wounded Warrior Project, an organization to help injured veterans (see page 17). The company is inspecting all its equipment on jobsites and for any that aren't in compliance with service intervals, the company donates $500 to WWP, with a minimum $10,000 donation if there aren't enough non-compliant units to make that large a donation.
Everybody knows non-residential construction will be weak in 2010, but there may be some positive sectors. Some ARRA funding is likely to trickle through and provide a few benefits to rental. Base Realignment and Closure funding is bringing about construction on military bases in some areas. Although it's not a high percentage of work, there are likely to be some bright spots in construction for educational institutions; health-care facilities will be a growing necessity especially as the population ages. Electric power generation and grid work might provide some opportunities and the oil, natural gas and environmental industries have potential in a lot of areas.
The year 2010 will be a year of creativity in the rental industry. It will be a time of innovative change because it will have to be. You will find new innovations because your backs will be against the wall. You'll have to make tough decisions, possibly ones that won't be satisfying whichever way you choose.
Some companies will strain to the breaking point and not be able to make it. I wish you all the best in 2010. You'll need courage and fire and strength and patience. Most of you will make it through fine.
That's why I expect there will be some great stories to be told in 2010, and ultimately you'll be writing them.