The RER 100 topped $40 billion in 2023 rental volume for the first time, totaling $41,017.1 million, more simply $41 billion. The record total was a $15.8-percent increase compared to 2022’s total rental volume of $35,409.9 million, or more simply, $35.4 billion. That was 22.9-percent more than the previous year, and the second-highest year-over-year increase in the 21st century.
While this year’s 15.8-percent increase was less than last year’s increase, it was the fourth largest in the 21st century, topped only by a 25-percent increase in 2000, 22.9 percent last year, and a 17.6-percent jump in 2011 when the economy was rebounding from recession.
So it would be safe to say the rental market remained strong in 2023, and from the comments of RER 100 executives, they expect a continued strong rental market in 2024. It would be fair to say the rich got richer. There was a clear advantage to being large. As we’ve often said in describing the rental industry – and many other industries – size does matter. Large companies got larger and many rental companies on the lower half of last year’s listing were acquired, helping the top three companies get even bigger and spread out into new territories.
United Rentals, Sunbelt Rentals and Herc Rentals continue to acquire smaller companies and most likely those efforts will continue in 2024. And some others on this list, such as H&E Rentals, formerly referred to as H&E Equipment Services, Cooper Equipment Rentals, Rental Equipment Investment Corp., and Skyworks made significant acquisitions. Others on a smaller scale, such as Rental Guys, made acquisitions that may not have grabbed as many headlines, but they showed that merger & acquisition activity is happening on a lot of different levels.
The pace of post-pandemic growth has been dizzying to say the least. While the pace of growth in 2024 is expected by many in the industry to slow down a bit in 2024, that may just give everybody time to catch their breath because it is likely to heat up again during the next few years as mega projects, stimulated by the Infrastructure Investment and Jobs Act and the CHIPS and Science Act, shift into high gear.
The top 10 of the RER 100 totaled $31,090.1 million, that is about $31.1 billion, compared to $26,733.8 million, or $26.7 billion last year, a16.3-percent increase after last year’s 24.3-percent increase. It was the sixth largest year-over-year increase in this century for the top 10, trailing 2000’s 32 percent, last year’s 24.3 percent, 2011, 2017 and 2018.
In general, the increases from 2022 to 2023 were not quite as dramatic as from 2021 to 2022 when post-pandemic pent-up demand was at its height. In this year’s chart there were 46 double-digit percentage year-over-year increases compared to the previous year’s listing, while in last year’s chart there were 54 double-digit increases compared to the previous year, of the roughly 75 reporting companies. And in last year’s chart, there were considerably more double-digit increases covering higher ranges, such as 20, 30, or 40 percent. Still, there were not too many complaints coming from the RER 100 companies.
Year of expansion
Expansion is the name of the game in other areas in terms of growing the size of the fleet and expanding into other niches, such as Sunstate Equipment acquiring a couple of trench-shoring rental companies to grow its footprint and its expertise in that area. Cooper Equipment Rentals expanded geographically in Western Canada as well as
growing its heavy equipment offering with Hub Equipment, which specializes in heavy. Skyworks expanded into the Florida market. Rental Equipment Investment Corp. acquired a couple of heating specialists, thus growing in the specialty area. Cat Rental Store pioneer Wagner has been expanding in allied products with an emphasis on aerial equipment.
Bottom Line Equipment, a Louisiana-based company is making quite a move into Texas with greenfields and acquisitions. PDQ Rentals has expanded geographically and extending more into the dealership aspect of the business. Durante Rentals is growing into the Delaware-Maryland-Virginia market. Rental Guys made an acquisition and opened branches, growing regionally in northern California.
Those aren’t all. Dozens of other companies on the list opened branches, made acquisitions or grew into different equipment niches. The RER 100 companies continue to move forward, be aggressive and take risks. Standing still seems to be moving backwards.
While most of the RER 100 executives we heard from expect more moderate demand from their customers in 2024, they still are confident in overall market conditions although the possibility of downward pressure on rental rates and crowded and overly competitive rental markets should not be overlooked as 2024 goes on.
To view the complete RER 100, click on our digital edition: https://mydigitalpublication.com/publication/?i=823823
