Every presidential election brings with it a fair amount of anxiety for business people, and during conversations with readers, I’ve heard many of you say the outcome of this race is a significant concern. Some of you have even indicated you were holding off on capital expenditures and expansion plans until the results are in.
While these concerns are certainly valid, I think it’s wise for us to maintain a healthy perspective, particularly in the face of some of the best circumstances the rental industry has ever seen. To start with, industry analysts have reported that rental penetration has breached the 50-percent mark. More contractors are renting than ever before and the trend promises to continue. The question now is whether or not it’s a permanent change in the way construction professionals view equipment acquisition or a temporary adjustment driven by the economic cycle.
Garry Bartecki, managing member of GB Financial Services LLP and VP Finance for the Associated Equipment Distributors, says he believes there has, in fact, been a permanent paradigm shift and we’re moving in the direction of the European model where the majority of equipment on every jobsite is rented. Contractors’ current lack of capital to buy new equipment is certainly a contributing factor, but it’s not the whole story. Experts agree contractors have begun to truly understand that commodity-type units are cheaper to rent than own. “Not only are contractors renting more, they are sticking with the rent-to-rent transactions and avoiding rent-to-sell options,” Bartecki says.
Market indicators show the industry poised for substantial growth through the next year and as far as 2016. Working in a cyclical market, we’ve enjoyed the boom times of the past, bracing ourselves for the inevitable downturn that follows. The difference in this case is that rental’s growth is and will be based on more than the vagaries of the construction cycle. It’s founded in part on consumers’ realization of the benefits renting can provide, supporting a sustainable and far-reaching growth pattern.
So before you bite your nails through election night, take a deep breath and revel in the positive indications for future prosperity. Whatever the outcome of this presidential race might be, the rental industry is in a solid position for growth.