Frank Manfredi, president of Manfredi & Associates Inc., has been a consultant to the heavy-equipment industry for more than 35 years, during most of which he has published a monthly newsletter, Machinery Outlook, which is seen as a critical source of information about the construction, mining, agricultural and material-handling machinery markets.
The U.S. construction equipment rental business is on a tear. I estimate 2014 total rentals of construction equipment will be $36.6 billion, a gain of 12% over 2013. I also estimate rentals will reach $40.6 billion in 2015 at a growth rate of 11%.
Hertz just announced it will spin-off its Hertz Equipment Rental Corporation (HERC) to shareholders, while Volvo just completed the sale of its equipment rental business, Volvo Rents, to Platinum Equity Partners. What's going on?
The equipment rental business hit a sweet spot in 2011 that continued well into 2012. In our opinion, the market will benefit from a number of tailwinds allowing it to continue growing at double-digit rates into 2014 and perhaps beyond.