If the past couple of years have taught us anything, it’s that the rental industry is resilient. Businesses around the country have faced unique circumstances, but rental has remained strong. As we continue to come through this, here are some of my observations and a couple of predictions for this year.
I feel that the rental industry is poised for more growth in many areas of the country. Of course, some rental companies located in depressed market areas, as well as those in areas that have too much competition may likely continue to have much more modest gains. Also, those companies that have been clinging to practices that should have been discarded will inevitably yield below-average results.
My customers have experienced excellent gains in 2021 and are positioning their companies for continued growth and prosperity in 2022. Even so, most of them have serious concerns about the current direction of the country and doubt our nation’s political leadership’s ability to handle the economic, social, and international challenges we are facing now.
I am increasingly concerned about potential conflicts with increasingly hostile nations (especially Russia, China and to some extent North Korea). Even though we have had less than cordial relations with these countries for many decades without drastic consequences, I feel that we may have conflicts in the near future that could be surprisingly severe (with a corresponding negative affect on our economy). I hope I’m wrong, of course.
Perhaps surprisingly and as I’ve related in the past, I remain very positive and upbeat about our country’s future and our industry! There have been plenty of uncertain and troubling times in our nation’s history. As I’ve stated many times in the past, our country’s culture of success, the unique nature of the rental business, the tenacity and hard work of the people who own, operate and work for rental businesses, and, of course with the help from God, have all combined to pull us through every time. I believe it is wise to make a pledge to remain positive and successful in your rental business no matter what happens through careful preparation.
I also think that the rental industry is poised for much more competition. You are not alone in your awareness of the strong need for rental equipment in our country and the gradual effect that growing housing, remodeling and infrastructure spending will have in our country. The growth and underlying financial strength of equipment rental companies will be noticed by your current and potential new competitors. For some rental companies, this can be the cause of increased concern and worry, while to those who wish to be acquired may view this as an excellent opportunity to sell their companies for a higher premium. Either way, it is usually not wise to rest on one’s laurels and do nothing. Improving the company with better training, procedures and marketing will prove its worth.
I believe that stronger-than-expected growth for progressive, independently-owned and -operated rental companies is likely.
I also feel that there will be many more independents who will be actively seeking to grow their rental companies through starting or acquiring another location in a neighboring community (but outside of their traditional territory).
Some rental business owners are comfortable with a slow and steady approach, and that suits their comfort level and the needs of the less-than-vibrant economic condition in their community. But there are some who will be more aggressive because of their local market potential. Of course, seek the advice of a rental business consultant who has worked with a significant number of rental companies before pulling the trigger on large investments.
And finally, another trend that I foresee for 2022 and beyond is the emphasis rental business owners will place on greater employee effectiveness and efficiency. The need in these areas has been great for some time but because of company “growing pains” and of course, the vastly increased competition for quality help, I have seen increased demand for this type of training for employees and managers.
Barring a new major national or international calamity, I feel that the rental industry is in excellent shape and is poised for more growth. I believe the combination of relatively low interest rates, moderate inflation, continuing building and remodeling demand, the shortage of construction equipment available for purchase, and increasing infrastructure spending, all point to considerable potential for rental companies. So, remember the importance of remaining positive and focused on moving forward.
