Rental Show sends the right signals
By Lindsey Anderson and Murray Pollok02 March 2011
The first day of the Rental Show in Las Vegas felt like a return to old and better times and even though attendance started to fall off in the second day, exhibitors were taking comfort from a clear shift in confidence levels.
Nobody was kidding themselves that a robust recovery was underway - rental prices remain depressed even if utilisation is up - but the larger rental companies are starting to refresh their fleets and spend some money. The show floor was awash with talk of big orders, including a Hertz aerial platform deal involving 1000 trade-ins and 2000 new machines.
"For the last two years we've come to the show and it has been a downer", said Terex AWP president Tim Ford, "The message for this year is that the industry is making a turn - you can feel it in the energy levels of the visitors".
Mr Ford acknowledged that smaller and mid-sized renters have still to follow the lead of the nationals, since they are finding it more difficult to get finance, but Terex AWP remains confident that 2011 will see a big improvement, with forecast sales increases of 26 to 45%.
Manufacturers are now facing problems meeting the demand from the bigger US rental companies, with problems in the supply chain and also rising raw material prices - steel alone is up around 25% since November. Mr Ford said it was inevitable that prices would have to go up if input costs did not fall.
Snorkel's president in North America, David Smith, told AI that the company was ramping up production; "We're building our inventory, but the biggest issue right now is the supply chain," he said.
As Richard Tindale, Snorkel's vice president of sales and marketing in Europe, Africa and the Middle East, told AI, "The features of the year are going to be increasing prices and longer lead times."
The US rental sector is anticipating a return to growth for the first time since 2008. At the opening ceremony of the show, Chris Wehrman, ARA's chief executive officer, said; "We're probably looking at a 7-8% increase in our rental volume in 2011...We're real pleased that we're able to say it will be a better year."
Still, rental companies remain cautious about the US economy and many have still to commit to significant investment. The CEO of one of the big US rental companies told AI that expenditure was on fleet replacement rather than growth, and that it was still risky for companies to invest on the expectation of significant increases in demand.