ARA: Construction and industrial equipment revenues totaled $25.5 billion-plus in 2007
The American Rental Association and Global Insight, an economic forecasting firm, have released the 2007 State of the Equipment Rental Industry report, indicating U.S. construction and industrial equipment revenues totaled more than $25.5 billion last year.
“We saw good growth from 2006 to 2007,” says Ken Hughes, vice president of communications, ARA. “The construction and industrial equipment division was the largest revenue producer for the rental marketplace.”
While Hughes is confident the construction equipment division will continue to be the leader in rental, he says it is too soon to say whether or not the significant drop in residential construction will affect 2008’s numbers.
Overall, the North American rental market totaled $42.3 billion last year, which includes $36.5 billion in the United States and $5.8 billion in Canada and also accounts for party rental revenues.
According to ARA’s report, the U.S. rental market has had a compound annual growth rate of 7.9 percent since 1998. The findings also predict continued growth in the U.S. market at a compound annual growth rate of 4.1 percent from 2007 until 2012.
General tool rental remains the fastest growing U.S. segment, with $8.5 billion in rental revenue last year and 11.6 percent compound annual compound growth from 1998 to 2007.
“We’ve experienced tremendous growth for the past five or six years,” Hughes says. “This year, the rental industry’s growth and success will depend heavily on rental stores’ inventory and the effects of competitive pricing.”
To obtain a full copy of the report, call the American Rental Association at 800-334-2177, or contact the organization by fax at 309-764-1533. The report is available to ARA members for $695 and to non-members for $2,995.
Volvo Rents expands franchises in South Florida
Volvo Rents continues to expand in the South Florida market with the opening of its newest franchise in Pompano Beach, Florida, despite reports of declining residential construction across the nation. Volvo Rents has additional locations in Tampa, Fort Myers and Port St. Lucie. The Pompano Beach location houses a $15 million fleet that includes large earthmoving equipment and general rental equipment for the construction, commercial and industrial markets.
United Rentals announces record earnings for 2007
United Rentals reported record earnings per share for the fourth quarter of 2007 and full fiscal year. The company’s EPS experienced an 18.3 percent increase in the fourth quarter of 2007. United Rentals’ fourth quarter net income reached $153 million, almost triple the amount made in 2006. Rental revenue also increased 4.1 percent in the fourth quarter to $683 million, and 4 percent for the full year, or $2.63 billion – an industry record, according to United Rentals. Total revenues equaled $3.73 billion for 2007.
RSC reports fourth quarter results
RSC Holdings’ rental revenues increased 10.8 percent to $399 million in the fourth quarter of 2007. Sales of used equipment were down from 2006 and sales of merchandise were at $19.8 million compared to $21.8 million in the fourth quarter of 2006. Total revenues were $458.1 million – up 7.6 percent from 2006.
QT Equipment develops nationwide rental program
Noticing a lack of service equipment rental stores, QT Equipment, distributor for Iowa Mold Tooling, created a nationwide rental program specifically for the rental of mechanics trucks, lube trucks and articulating cranes. Clients across the country may now rent from any of QT Equipment’s locations in Tampa, Florida; Akron, Ohio; or Columbus, Ohio.
The Akron headquarters is expected to handle the majority of rental orders. “Customers have been asking about rental options for years, so we’re pleased to bring them this program as an alternative to purchasing service equipment,” says Doug Root, owner of QT Equipment.
The company’s current rental fleet has more than $2 million worth of built and ready-to-build inventory, including IMT Dominator mechanics trucks, IMT SiteStar lube trucks, IMT articulating cranes and QT lube trailers. Available IMT Dominator mechanics trucks include 2008 Ford F-550s with 11-foot Dominator I service bodies, IMT 3820 telescopic cranes with more than 20-foot reach and 35 cfm hydraulic compressors; 2006 Ford F-550s ready to be put into service for the first time and other IMT mechanics truck packages on Ford F-750s, International 4400s, Kenworth T300s or Peterbilt 335s.
“Our biggest challenge will be maintaining capital to support customers’ needs,” Root says. “Fleet managers typically like to rent service equipment anywhere from three weeks to six months. If the market presents itself, we will keep increasing our inventory to support that need.”
Prior to establishing the nationwide program, the company tested its rental capabilities by allowing customers in construction, mining and municipality services to sign rental contracts and rent various pieces of equipment. “We did this for about a year – sort of like a trial run,” Root says. “Now, we have customers who are signed up for four and five year contracts.”
As for parts service and routine maintenance, QT Equipment offers customizable fleet maintenance packages through IMT. “Some customers may prefer to maintain the equipment themselves, and in other cases we can handle maintenance in house, such as oil changes,” Root explains.
If equipment fails, QT Equipment will send a replacement piece at the customer’s request. “Since we’re focused on the IMT line, we have most of the parts in stock,” says Dan Root, vice president of marketing, QT Equipment. “When failures creep up, our service people can overnight parts and help customers out over the phone.”
For those who want to rent-to-own, the company offers buyout options specific to the rental item and rental period, with a percentage of the rental payment applicable toward the purchase price.
“We expect this to be a long-term venture for us,” Doug Root says. For more info, visit www.qtequipment.com.