According to the 2014 Construction Industry Forecast by Wells Fargo Equipment Finance, equipment rental will remain strong in 2014, with 91.2% of surveyed contractor indicating they intend to rent equipment this year.
Nearly 80 percent of surveyed contractors said they rented equipment in 2013, and 91.2 percent said they intend to rent in 2014. Distributors and equipment rental companies almost universally say they will maintain or grow their rental fleets. When asked to cite their reasons for renting versus purchasing, 72.8 percent of contractors identified "lack of consistent work" ahead of "need for project-specific equipment" (67.4%) and "overall equipment costs" (52.5%).
The forecast says construction industry executives across the U.S. expressed strong optimism that local construction activity will increase in 2014 compared to 2013. Based on the responses of 522 executives, the survey’s Optimism Quotient (OQ) - this survey’s primary benchmark for measuring construction industry executive sentiment - reached an all-time high of 124, up 18 points from 106 in 2013 and up from the survey low of 42 in 2009.
Meanwhile, equipment acquisition is also on the rise. Sentiment among U.S. contractors is that purchases of new construction equipment in 2014 will remain similar to, or perhaps increase slightly, compared to 2013. One quarter (26.1%) said they would increase their purchases of new equipment compared to a year ago, a 5.3 percentage point improvement. One in ten contractors (11.9%) said they would not acquire new construction equipment in 2014, an improvement from 19.1 percent in 2013.
For the coming year almost two-thirds of distributors (62.7%) said that they expect an increase in new equipment sales. A similar but less robust group (57.5%) said they expect growth in used equipment sales.