The recession stifled demand for equipment and caused rental prices to drop
Los Angeles, CA (PRWEB) May 24, 2013
The Industrial Equipment Rental and Leasing industry provides a wide range of products, including industrial machinery, some construction equipment, entertainment products and medical devices. "The variety of products included in the industry offsets the impact of fluctuations in demand in any one market," IBISWorld industry analyst Dale Schmidt says. Nonetheless, the recession stifled demand for equipment and caused rental prices to drop. Consequently, industry revenue is expected to fall at an annualized rate of 0.6% to $3.0 billion in the five years to 2013.
The Industrial Equipment Rental and Leasing industry's reliance on heavy industry and manufacturing, as well as its diverse product offerings, tie its performance to the health of the overall US economy. "When businesses grow or expand operations, the need for new office, retail and industrial spaces stimulates demand from contractors that rent equipment for such functions as carpet installation, woodworking, door manufacturing, carpet cleaning and other construction-related activities," Schmidt says. Manufacturers rent industrial machinery to increase capacity when demand calls for it. Other factors, such as consumer spending on entertainment, can influence the frequency of production studios renting audiovisual equipment. State and federal government budgets drive demand for rental equipment in institutional buildings.
The recession caused three consecutive years of declining revenue, consistent with the general slowdown in economic activity. But the industry began to rebound in 2011, and revenue posted ever-stronger growth in 2012. This growth will be driven by industrial activity across most sectors and by the stabilizing influence of the healthcare sector, which consistently demands medical devices for rent because current models become obsolete quickly. However, growth is expected to slow to only 0.3% in 2013 as construction growth moderates from its recession rebound. Overall, the industry's top two players, United Rentals Inc. and Hertz Global Holdings Ind., account for an estimated 18.7% of industry revenue. As a result, the industry has a low level of concentration as the majority of industry establishments operate locally. Due to the moderate barriers to entry and high level of competition, very few new players entered the industry during the past five years; however, IBISWorld estimates the number of industry establishments will grow in the five years to 2018. As a result, concentration will remain low during the long term.
Moving forward, as rental becomes a more widespread tactic to combat volatile demand and make otherwise-fixed costs more flexible, IBISWorld forecasts industry revenue to rise during the five years to 2018. For more information, visit IBISWorld’s Industrial Equipment Rental and Leasing in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry rents or leases a variety of equipment used in manufacturing, metalwork, carpentry, agriculture, telecommunications, and motion picture and entertainment. The industry also rents furniture for schools, theatres and other institutional buildings. Heavy construction equipment, such as aerial lifts, forklifts and earthmovers, mining and forestry machinery and office equipment are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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