24
ACCESS, LIFT & HANDLERS
NOVEMBER-DECEMBER 2013
RENTAL REPORT
year, and a 3.2 percent increase in rental rates.
United says it expected rates to rise by at least 4
percent over the full year.
“Rates were up year-over-year for every
major equipment category, including boom lifts,
scissor lifts and reach forklifts,” says Flannery.
“In fact, all of our major aerial categories saw
increases in daily, weekly and monthly rates
compared with last year. A fair rate structure
offsets the inflation of rising equipment costs.
This is important not just for United Rentals, but
for the health of the entire rental industry.”
United will invest around $1.6 billion gross in
its fleet this year, the company says, with its
core aerial range being an important part of its
investment in 2014.
“Our purchase process is deliberately fluid
because we want to stay responsive to customer
needs,” Flannery says. “Any of the aerial
categories in our fleet can be a candidate for
investment based on demand.”
United’s branches are reporting strong
utilization of large booms and reach forklifts,
Flannery says.
“The rental industry saw a lot of defleeting in
these categories during the downturn, and while
some rental companies are now reinvesting,
demand still outweighs supply,” he continues.
“That puts us in a favorable position to capture
business. We expect that larger booms and
reach forklifts will continue to be high-return
categories for the foreseeable future.”
Flannery also says the telehandler has really
come into its own as a business solution.
Echoing Watts of Sunstate, Flannery says a
lot of industries have adopted telehandlers for
productivity and safety considerations.
“We’re serving requests for telehandlers
on projects in oil and gas, energy and
nonresidential construction, as well as the
government sector,” Flannery says.
With ConExpo right around the corner,
Flannery admits new equipment launches might
be on the horizon.
“We’ve not yet completed our fleet planning
for 2014, but I feel comfortable in stating that if
there are any new and unique fleet offerings that
will add value for our customers, we’ll invest in
them,” he says. “This is one of the advantages
of being the largest equipment rental company
in the world with the resources to pursue
growth.”
With United Rentals comfortably atop the rental
mountain, it’s safe to say the strong quarter for
the company – backed by a record 49 percent
adjusted EBITDA margin – sets the scene for
2014.
Michael Kneeland, chief executive officer of
United Rentals, was and is ready for it. “This is
the environment we anticipated when we set
our full year financial targets, and we expect
that non-residential construction will continue to
trend upward in 2014.”
■
ARA forecasts
The American Rental Association (ARA) figures come
from its quarterly Rental Market Monitor produced by
consultant IHS Global Insight.
“The U.S. economy slowed more than expected in the
first half of the year, but equipment rental demand has
remained strong,” said Scott Hazelton, a senior partner with IHS Global insight. “We have lowered
our growth expectations for 2013 modestly to reflect this, but rental growth will still handily
outperform the overall economy.
“The path ahead still looks promising with employment growth continuing and housing
data coming in strong, which implies an improving commercial construction market to follow.
Industrial markets, especially those tied to energy exploration and production, also should see
growth”.
U.S. revenues will reach $33.5 billion with year, a 7 percent increase, with growth reaching 7.8
percent in the fourth quarter.
In the U.S., the construction market and consumer spending continue to be the most important
drivers of growth of the equipment rental market in 2013.
The construction and industrial equipment segment is forecast to grow 8.1 percent in 2013,
while general tool segment revenue is expected to increase 5.4 percent over 2012. Party and
event rental revenue is forecast to increase 2.4 percent.
In Canada, the equipment rental industry is forecast to generate nearly $4.6 billion in revenue
in 2013, a 2.8 percent increase, and to continue growing throughout the forecast to reach nearly
$5.4 billion in rental revenue in 2017.
United Rentals units on a recent jobsite.
