Ok, yes, so far the new millennium has only lasted for about a decade and a half, but still. In just 15 years, the U.S. construction industry has seen two massive disruptions that have shaken up construction forever. Number one, obviously, was the housing bubble. During the aughts, the United States learned a painful lesson, the kind of lesson that always seems obvious in retrospect — housing prices couldn’t keep rising forever. When the bubble popped exploded, housing starts and residential construction took a huge hit, one the industry is still recovering from today.
And in part because of the major contraction experienced over the last seven years, another huge trend has emerged, the rise of construction equipment rental companies. The rental market has massively expanded in recent years, and by some estimates, up to 51% of all new construction equipment now ends up on rental lots. Gone are the days when companies would amass a massive fleet of tools, trucks, and power equipment. Now, many companies are spending their money on tools for rent.
Why are so many construction firms opting to get their best equipment from rental companies? There are a variety of reasons, but we can pinpoint a few major incentives. First, as companies looked to reduce overhead during the recession, suddenly tools for rent became a much more attractive way to save costs. Rather than spend money purchasing equipment, maintaining equipment, storing equipment, and paying insurance on equipment, companies could instead find tools for rent on an as needed basis. That allowed them to reduce overhead on a variety of fronts.
Second, the rental market greatly expanded as a result. Suddenly, rental companies were offering power equipment rentals, compaction equipment, truck rentals, and a wide range of other necessary supplies. And finally, many companies realized that rather making a huge investment in purchasing tools, they could instead rent and ensure that they always had the best and newest tools available.
And that’s why industry experts expect the rental market to grow in the years to come.
