US dealers forecast strong rental growth

Rental activity is expected to remain strong in the US this year, with construction equipment dealers forecasting 12% growth, according to a survey by rental finance company GE Capital Equipment Finance.

In March and April, GE Capital asked 50 of its dealers across the US about rental activity, equipment purchases and utilisation rates.

Gary Kurp, rental national account manager at GE Capital, said 95% of respondents planned to buy equipment for their rental fleets this year, with purchasing activity peaking in the second quarter.

“Although rental activity was soft in the first quarter of the year due to bad weather in some regions, we’re seeing a lot of positive movement in the second quarter,” he added.

Meanwhile, 96% of respondents said they were optimistic that their rental business would remain strong through the rest of the year, while 76% forecast that equipment utilisation would grow (against 24% who expected it to stay the same).

And 68% of respondents said the size of their rental fleets grew in the first quarter versus the prior year.

GE Capital said the popularity of equipment rentals had increased as contractors and construction companies continued to be reluctant to commit to large purchases.

It said renting, rather than purchasing or leasing, allowed fleet owners to access the latest machines without the large upfront payments.

In January, GE Capital expanded its financing program for dealers in a move that it claimed made it easier for them to purchase construction equipment for their rental fleets.

It said line-item financing — where equipment is purchased unit by unit — allowed dealers more flexibility than traditional financing for a pool of equipment.