The rental segment of construction equipment dealerships will grow about 12 percent this year, according to a survey of construction equipment dealers conducted by GE Capital, Equipment Finance. The popularity of equipment rental has increased as contractors and construction companies continue to be reluctant to commit to large purchases, the survey found.
Renting, rather than purchasing or leasing, allows end users access to the latest machines without large upfront payments. Additional findings show that 96 percent of respondents are optimistic that rentals will remain strong through the rest of the year. The survey also finds that 76 percent expect equipment utilization to grow while 24 percent expect it to stay the same this year.
Also, 68 percent of respondents said the size of their rental fleets grew in the first quarter versus the previous year.
“Although rental activity was soft in the first quarter of the year due to bad weather in some regions, we’re seeing a lot of positive movement in the second quarter,” said Gary Kurp, rental national account manager at GE Capital, Equipment Finance. “It’s promising that 95 percent of survey respondents plan to buy equipment for their rental fleets this year, with purchasing activity peaking in the second quarter.”
In March and April, GE Capital asked 50 of its dealers across the United States about their opinions on their own business’ rental activity, equipment purchases and utilization rates. In January, it expanded its financing program for dealers to facilitate purchases of construction equipment for their rental fleets.