Road building drives Latin American rental

By Helen Wright29 February 2016

A survey by the US Association of Equipment Manufacturers (AEM) has found that construction of highways, bridges, railroads and airports is fuelling growth in the equipment rental market in five Latin American countries.

The AEM said it surveyed construction equipment dealers, distributors and equipment rental companies in Argentina, Chile, Mexico, Peru and Venezuela. The results showed that over 70% of survey respondents said transportation infrastructure was the most important market segment for equipment rental.

This sector was followed by oil and gas, dams, water and sewage (59.6% of respondents); mining and extraction (46.2%); and residential, commercial and industrial building (42.3%). The AEM noted that, due to multiple answers, the total exceeded 100%.

It said the most-rented types of equipment were loaders and backhoes, followed by excavators, wheeled loaders, electric generators and rollers.

To keep utilisation rates up, the AEM survey found that rental managers said they maintained fleets of equipment in high demand while offering competitive rates, long-term rentals and discounts.

Asked if rental rates were increasing, the overwhelming majority to the AEM survey said no, primarily due to market saturation. A small number said yes, for economic reasons such as higher interest rates, inflation and machine availability.

When asked why contractors were renting more than purchasing, rental managers offered a range of responses to the AEM survey. A total of 66.7% of respondents said subcontractors were fulfilling equipment needs, for instance, while 64.7% said the economy was weaker and 26.7% said the presence of new start-up companies without sufficient capital to purchase new equipment was fuelling growth.

And a further 20% said a lack of product availability helped boost the rental industry. Again, the AEM pointed out that, due to multiple answers, the total exceeded 100%.

The survey was conducted by AEM at the request of the Construction Equipment Latin America Regional Management Committee.

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