More than 65 percent of rental company respondents to an RER poll conducted in November said they expected rental volume to grow in 2008 compared with 2007, according to RER’s research department. With 34.2 percent predicting a 1- to 5-percent increase, 28.6 percent up 6 to 10 percent, and 3 percent up more than 10 percent, the sense of optimism among rental company owners and managers remains strong.
About 15 percent predicted a drop in rental volume, with 17.6 predicting flat year-over-year volume.
Based on information companies had available in November, 59 percent predicted rental volume in 2007 would finish higher than 2006, with 38 percent predicting volume boosts in the 6- to 10-percent range; 5 percent predicting volume increases of greater than 10 percent and 16 percent expecting rental volume to increase 1 to 5 percent. Nine percent predicted even revenues year over year, while 10 percent expected a 1- to 5-percent drop, and 17 percent a 6- to 10-percent drop. Two and a half percent expected drops of greater than 10 percent.
About 55 percent said utilization in 2007 would end up higher than 2006, with 32 percent expecting a 1- to 5-percent utilization increase and 23 percent expecting increases of 6 to 10 percent. About 26 percent expected drops in utilization, roughly divided between those that expected 1- to 5-percent drops and those that expected 6- to 10-percent plunges. Fifteen percent expected utilization to be essentially flat.
About 48 percent said their companies would be more profitable in 2007 than 2006, with 31 percent saying profitability would decline. Fifteen percent predicted even profitability.
A possible slowdown in construction or industrial segments was tabbed by 39 percent of respondents as the business factor of greatest concern looking ahead to 2008, with 28 percent saying the housing slowdown was their greatest concern. Eighteen percent cited increased competition in the rental market as their biggest concern, with 6 percent pointing to a possible rise in interest rates.
More than 40 percent of respondents said they increased rental rates in 2007 and 50 percent say they expect to raise rates in 2008, with 36 percent saying they expected even rates. Forty-three percent said they’d raise rates 1 to 5 percent, while 7 percent of respondents said they’d raise rates 6 to 10 percent.
Fifty-five percent of respondents said they expected to increase capital fleet expenditures in 2008 compared to 2007, while 17 percent said they expected to decrease fleet capex. About 24 percent of respondents said fleet capex would be about the same.
Of intended purchases, 53 percent indicated aerial work platforms; 39 percent compact earthmoving equipment; 37 percent compaction equipment; 36 percent forklifts; 33 percent concrete equipment; 32 percent lawn-and-garden equipment; 31 percent tabbed air compressors, telehandlers and attachments; 29 percent picked generators; 27 percent pumps; 24 percent earthmoving; 24 percent scaffolding; 17 percent welding equipment; 15 percent hydraulic breakers, and 11 percent drain-cleaning equipment.
