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Equipment Forecast: Rental Fleet Purchases May Contribute to Modest Gains

November 26, 2012, 07:57 AM
Filed Under: Rental News reported that despite the fact that analysts are expecting U.S. construction to rise next year, many believe contractors will continue to turn to rental and leasing companies rather than buy large quantities of new equipment for their projects.

The report quotes Frank Manfredi, president of market research firm Manfredi & Associates saying, "Most people think that the rental companies will continue adding to fleet this coming year. But instead of buying earthmoving equipment, they are going to be buying lifting equipment, including telescopic handlers and aerial platforms."  Manfredi estimates that, in 2012, rental companies purchased between 45% and 50% of all the new units sold in the U.S.

The report also cites Manfredi’s forecast for new sales in the U.S. to rise 11% this year followed by softer, 4% growth in 2013, saying the industry looks to be exiting a strong replacement cycle. For equipment sales to continue rising, new construction also must rise.

The report also cites commentary from Ken Simonson, chief economist for Associated General Contractors of America, who sees homebuilding next year as a "big unknown" but says it has the potential to gain momentum in the latter half of 2013. Oil-and-gas drilling, transportation, manufacturing and other work should help support a "modest increase" in equipment spending, says Simonson, who sees rental companies buying the lion's share.

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