A recovery in downstream markets strengthened demand for heavy equipment
New York, NY (PRWEB) April 19, 2015
Operators in the Heavy Equipment Rental industry rent or lease heavy construction and transportation equipment, ranging from excavators to airplanes. The industry's financial performance is subject to trends and activity in an array of downstream industries, including air, sea and rail transportation; highway, street, tunnel and bridge construction; and oil exploration and drilling. “General economic conditions, such as interest rates, unemployment and disposable income, also play an important role in determining demand for the industry's products,” IBISWorld Economic Analyst David Witter says in the updated report. Over the five years to 2015, growing demand from downstream markets, driven by the economic recovery, helped the industry continue its positive growth trajectory. IBISWorld estimates revenue will rise in the five years to 2015.
Conditions were grim for rental and leasing businesses prior to 2011. A struggling economy caused all downstream industries to contract. However, in 2011, Heavy Equipment Rental industry revenue began to increase. Operators benefited from growth in downstream demand, including growth in both the value of construction and demand from rail transportation, and a cautious business environment in which developers and business owners opted to rent rather than purchase equipment to free up capital for other needs. This trend will continue through 2015, albeit at a slower rate, with revenue expected to increase a modestly over the year.
Over the five years to 2020, stronger demand from downstream transportation, mining and construction sectors will boost industry performance. IBISWorld forecasts that, over this period, industry revenue will increase; profitability is expected to follow suit. “After initially suffering a significant drop in demand and an increase in price competitiveness, average profit margins are forecast to stabilize along with demand,” Witter says in the updated report. Growth in establishment and employment numbers will trail behind revenue as operators focus on internal cost savings. The number of industry players is expected to increase slightly in the five years to 2020.
For more information, visit IBISWorld’s Heavy Equipment Rental in the US industry report page.
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IBISWorld industry Report Key Topics
Industry operators rent or lease heavy construction, off-highway transportation, mining and forestry machinery, and equipment without operators. Operators in this industry may rent or lease products including aircraft, railcars, steamships, tugboats, bulldozers, earthmoving equipment, cranes or well-drilling machinery and equipment.
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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