Baird, in partnership with Rental Equipment Register magazine (RER), published the results of its fourth-quarter 2011 rental equipment industry survey, which showed rental revenue growth of 11.5 percent.
Respondents reported a steady demand in industrial markets while non-residential construction continues to suffer, though some regions are beginning to show improvement. The survey showed, however, residential markets are furthest behind in the construction industry.
The survey showed a growth in fleet size from 6.6 percent to 7.4 percent and a slight rise in rental rates from 3.3 percent to 3.8 percent. Despite the overall rise in rental rates, demand for rentals varies by region and may be lower in some areas than in others.
The average usage rate has slightly risen as well. It is up from 55.4 percent last quarter to 55.9 percent this quarter. Average usage for big iron equipment was 61 percent, small iron was 52.1 percent and other equipment was 43.9 percent.
Used equipment sales have increased 8.4 percent year over year.
The initial 2012 rental revenue forecast from the Baird/RER survey forecasts an upward trend of 11 percent in the upcoming year rather than the initial 6.9 percent reported in last quarter’s survey. The 2012 outlook for rental rates also improved with the latest survey, with estimates of a 5.4 percent increase, up from last quarter’s outlook of 4.3 percent growth.
Respondents expected fleet spending over the next six months to grow 8.6 percent, slightly below the 9.6 percent forecast last quarter.
“We believe that expectations for higher fleet spending continue to be driven by both an improved outlook and aging fleets, but note some lingering concerns over availability and financing,” said David Manthey, chartered financial analyst at Baird.
Participants in the Baird/RER survey were senior corporate executives or senior managers at regional divisions of rental equipment businesses in all regions of the United States, parts of Canada and some international markets.