At the peak?

10 April 2008

Sometimes it's easy to interpret the data we receive in the Access Confidence Survey, especially when there are strong trends. In the past three years, for example, we have been able to report on unfettered optimism. This year it's not so simple, mainly because of the uncertainty surrounding the world's biggest access market, the US.

Those of you looking for signs of a significant fall in fleet investment by North American rental companies won't find them here. Exactly half of all rental companies in that region reported an intention to grow their access fleets (compared to 52% last year), and manufacturers will also be pleased to note that the proportion planning no investment (to either grow or replace their fleets) actually fell from 32% to 29%.

What about general business expectations among North Americans? Here, there is definitely a switch in mood, with the proportions forecasting over 10% growth in revenues next year falling from 40% last year to 25% this year. Some 16% expect revenues to fall or stay level next year, which is also a significant increase on last year's survey. North American rental companies are the least likely – after those in Asia Pacific – to grow their fleets next year.

What to read into these findings? It seems that North American rental companies are still planning, at this moment, to continue growing and replacing their fleets, although are also expecting their returns to be squeezed. What is surprising, however, is that according to the data on rental rate expectations, North American's are not appreciably more pessimistic than their counterparts elsewhere: only 15% expect rental prices to fall.

“Excellent business opportunities as long as the big self propelled AWP manufacturers keep calm.”

Perhaps the survey has simply revealed that North American rental companies want to invest in their fleets, but are unsure about the business climate that awaits them in 2008.

This caution is reflected also in what the equipment manufacturers think. Manufacturers who sell mainly in North America are the least optimistic of all: a third expect over 10% growth in sales compared to over 60% of global manufacturers and 50% of European suppliers. North American's are the second most likely to forecast a drop in sales – 13.3%, compared to 3.3% of Europeans. Almost 90% of manufacturers expect to increase production levels, and those that focus mainly on the North American market are appreciable less bullish than those in Europe or Australia, although 85% are still forecasting higher production levels.

Still, overall, the survey reveals that the access industry continues to enjoy a healthy business climate. Almost 90% of rental companies expect revenue growth next year; 60% will expand their fleets (it was 78% last year); and there is very little change on expectations for rental rates, with the vast majority (78%) expecting no change or modest increases.

European, Australian/New Zealand and Middle East rental companies are most likely to grow their fleets next year (around 70%-75%).

We have a smaller sample of end user respondents, but the findings here are still useful. End users remain fairly optimistic about business levels and there are no big changes in the forecasts of fleet investment (51% will grow their fleets, marginally up on last year). Equally, they are forecasting no big changes in the demand for work for their aerial platforms – 70% expect that demand to rise, 28% see no change. Just 1% of end users expect demand to fall next year, which is a figure that will please rental companies.

A regional analysis of end user expectations does, however, give some interesting clues as to how business will evolve next year. North American's are the least likely to forecast over 10% increase in the workload for their aerial platforms (27%, compared to 35% in Europe and 60% in the Middle East); and North American end users were the only ones anywhere to forecast a fall (9% think demand levels will be lower).

Our Access Confidence Index – the rating from 0 to 100 that we ask respondents to give – also remains at a very high level of 71.3%, although this falls from 72.5% last year. The change is almost imperceptible.

To summarise, if your view of the access industry was that the US outlook was uncertain (although still at a high level of activity), and that demand was still healthy and growing in Europe, the Middle East, Latin America and Australia/New Zealand, then the survey confirms that.

What we can't say from the survey is how the US access market will actually perform next year. Like our survey respondents, we are simply waiting and watching.

“Strong growth in Asia and Indian sub-continent over the next three years. Sharp slowdown after 2011.”

Thank you

Our thanks to the more than 230 companies who responded to this year's Access Confidence Survey. We surveyed companies in September and October via an E-mail request and also through the weekly KHL WCW eNewsletter. For questions about the survey, please contact Murray Pollok, Managing Editor, by e-mail: or tel: +44 (0)1505 850 043.

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