Earthmoving Machinery Rental Procurement Category Market Research Report Now Available from IBISWorld

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There are few viable substitutes for renting earthmoving machinery, which lowers buyer negotiation power, but buyers benefit from low market share concentration, which means that price-based competition among lessors is high. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has added a report on the procurement of earthmoving machinery rental to its growing collection of procurement category market research reports.

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Price growth will accelerate during the next three years as suppliers’ input costs and demand grow at heightened rates compared to the past three years.

Earthmoving machinery rental has a buyer score of 3.1 out of 5, where a higher score represents better negotiating conditions for the renters. “Renter power is boosted by the low market concentration, which means that price-based competition is high among lessors,” says IBISWorld procurement analyst Erick Delgado. As a result, buyers are able to comparison shop for products among a number of vendors. Although there are few viable substitutes to renting earthmoving machinery, rental companies face considerable competition from leasing operations due to their lower monthly rates; this further pressures rental prices downward. Buyer power is also improved by the availability of discounted rates, which are awarded by renting in bulk or for longer periods.

Because earthmoving machinery rental is primarily done on an ad hoc basis without significant lead time, lessees have been left without a strategy to combat high price volatility. “Luckily, improvements in key downstream industries will stabilize demand and, thus, keep price volatility low over the next three years,” says Delgado. Consequently, buyers will be able to accurately budget future rentals and compare rates over time.

However, rental price trends will continue to be detrimental to negotiating power. Due to an improvement in construction activity, prices for new earthmoving machinery have increased over the past three years. Moreover, environmental regulations have increased manufacturers' research and development expenses and overall costs to operate. Higher regulations and improved demand have increased the cost for rental companies to update their fleets. With Tier 4 emission standards expected to kick in by 2015, rental companies' will be forced to hike up rental rates to cover escalating machinery prices. In addition, demand for equipment leasing has consistently grown over the past decade. Market preference has shifted in favor of renting and leasing equipment, as buyers find it to be a more attractive option than tying up capital. This trend weakens buyer power by placing renters in a growing pool of lessors' customers. As a result of these conditions, rental prices are expected to surge over the next three years, making it more difficult for buyers to negotiate lower rates. Major vendors in this market are United Rentals Inc., Sunbelt Rentals, Hertz Equipment Rental Corporation and Ahern Rentals Inc.

For more information, visit IBISWorld’s Earthmoving Machinery Rental procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers looking to rent earthmoving machinery. Providers rent or lease earthmoving machinery equipment used primarily in construction. Earthmoving equipment includes trenchers, loaders, excavators, backhoe-loaders and bulldozers, all of which can be wheeled or tracked. This report excludes rental services of other heavy construction machinery and equipment, such as paving equipment, cranes, generators, compaction equipment, material handlers, aerial lifts and forklifts.

Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics

About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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