Rental caught up with Frank Nerenhausen, president of JLG Industries Inc., at The Rental Show 2018 to talk about the current state of the aerial market and where he sees it going this year and beyond.
Rental: How do you see the aerial market shaping up in 2018?
Frank Nerenhausen, president, JLG Industries Inc.: I see general health and a sense of optimism for the year and for the future of the aerial business. Folks are seeing strong business in 2018, and we’re also seeing some of that outlook spilling into 2019, and then I think there’s a general overlay of potential support from the current administration for the outlying years of the cycle. Spending and tax reform are creating a positive long-term view that stimulates short-term behaviors, like investing in machines and making acquisitions.
Rental: There have been many promises made by the Trump administration, but much of it has not come to fruition yet. How is this having an effect on the aerial market?
Nerenhausen: You have business on the ground. There’s a current atmosphere in the construction markets that’s very positive. You can see that. You don’t have to get a macro report to tell you that, you can drive around and see the level of construction. That fulfills the current 2018 view. There’s a general pro-business type of atmosphere out there. Whether or not all of the infrastructure spending comes to fruition, there’s still a positive tone that helps the long-term view.
Rental: What are you hearing from customers?
Nerenhausen: They’ve bought quite a bit of equipment already. We came into this calendar year with record backlog, and we’re seeing that optimism reflect itself in purchase orders. That’s good. No one wants to get out over their skis and talk about 2019 or 2020, because you could always have some sort of binary event that changes things. But almost unanimously, 2018 is looking positive for customers across the board, and switching to hopeful for the future beyond that.
Rental: How do you see things shaping up globally?
Nerenhausen: This is an interesting time. There’s almost a global synchronous recovery within the aerial market, but for different reasons in the various regions. You have mature markets in North America and Europe that are experiencing general economic growth. Then you have adoption that comes in for China, which is our fastest growing market. South America has been lying flat for three years, but it’s starting to come back a little bit. Otherwise, the rest of the world is pretty strong.
Rental: Where does North America fit in?
Nerenhausen: I tend to think there’s some replacement buying already coming into 2018. One thing we try to make people understand is that the eight-year replacement cycle is just a guideline, it’s not a hard and true fact. You can’t look at 2009 and 2010 and say eight years later, there’s going to be a trough. Our customers are sophisticated, they can hang onto machines, buy early, there are regulatory milestones that come into play; it’s just a guideline. If the economy holds up, it could be good continued growth for the aerial industry for quite some time.
Rental: What are some of the big challenges facing the industry and how are you dealing with them?
Nerenhausen: It’s not unique to JLG, but many companies are talking about the lack of good quality labor. We try to approach it in a number of different ways. We look to provide world-class training, and so far we’ve been successful in finding the labor we need. It is challenging, and if the industry continues to grow, it will become more challenging. So we have to look at different ways of adding productivity to our business and retaining our current team members so we don’t go through this constant training cycle. It’s part of our “People First” initiative. We try to treat everybody as part of the JLG family, we want them to bring their hearts and minds, as well as their hands, to work. That’s the challenge. And then we look to other investments that can help us to grow the company in the future, such as new technologies that help our customers gain efficiency advantages on the job.
Rental: What are your predictions for the future?
Nerenhausen: If we don’t have one of these binary events, something out of the blue that clips our wings, we could have progressively good years for the foreseeable future. Every good thing does come to an end, but 2018 looks good and we’re starting to see positive momentum going into 2019.
Rental: What’s coming next for JLG?
Nerenhausen: We’re spending a lot of time listening to customers and the users of our equipment, then putting the right analytics around what they tell us to either modify the equipment we already have or develop completely new machines or technologies. I’m not going to tie this to any one project we’re working on right now, but we definitely have our ear to the street in a different way to bring useful information into our company which then drives our road map and strategy. One thing that’s fairly visible is our company thrives on producing the biggest machines in the world; our team loves that. But there’s also real opportunity for products under 6 meters, that’s where we see our investment in Power Towers, different EcoLlift products that require no electricity to run, products that create a safe working environment, not only on the construction site, but within the entire maintenance life of those commercial properties. It seems small now, but the industrial ladder market is a pretty big market. If we can gain traction with low level access and create a safer work environment, I think it’s a win-win.
