Higher levels of industrial and residential construction will drive rental demand
Los Angeles, CA (PRWEB) July 24, 2012
The Tool and Equipment Rental industry was significantly challenged by the economic recession's impact on consumer spending and construction activity. The industry rents a range of equipment used by consumers, contractors and businesses on a short-term basis. Most items are used during new construction, repair and renovation activities across all markets. As residential and non-residential construction levels plummeted over the past five years, demand for tool and equipment rental suffered, according to IBISWorld industry analyst Andrea Alegria.
High unemployment and the recession's adverse impact on household income levels forced homeowners to cut back on discretionary spending on gardening and remodeling projects, further hurting demand for tools and equipment rented by the Tool and Equipment Rental industry. More so, a contraction in the business sector characterized by reduced corporate profit and lower production levels also reduced demand for rented tools and equipment used by a number of businesses, including audiovisual equipment and moving equipment (i.e. forklifts and aerial lifts). A drop in discretionary spending also hindered the rental of party and banquet equipment and supplies, Alegria says. As demand for industry products dwindled during the recession, revenue declined by a steep 15.7% in 2009. In the five years to 2012, revenue is expected to decline at an average annual rate of 3.2% to $5.1 billion in 2012.
After four years of declining revenue, the Tool and Equipment Rental industry returned to growth in 2011 and is expected to grow 4.0% over 2012. Fueled by slight economic recovery, the industry is benefiting from a trend toward renting instead of purchasing tools and equipment, which stemmed from the economic downturn. Increasingly, homeowners that needed a tool to complete a home improvement project saved money by renting a tool instead of purchasing it. Now, as economic recovery is motivating homeowners to take on more home improvement projects, many will continue to rent instead of purchase equipment. Similarly, contractors under financial pressure and budget constraints are finding efficiencies in renting equipment and tools. This trend, along with improved disposable income and a resurgence of construction activity across all markets, will drive growth for the industry in the five years to 2017. Revenue is expected to grow. For more information, visit IBISWorld’s Tool & Equipment Rental in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes companies that primarily rent building and construction tools and small- to medium-size pieces of equipment to the household, commercial and industrial sectors. Examples of equipment rented by industry operators include audiovisual equipment, contractors’ and builders’ tools and equipment, home repair tools and commercial party and banquet supplies. Rental of heavy construction equipment and earthmoving equipment are excluded from this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
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Key Success Factors
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Barriers to Entry
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