Eye on Rental

RENTAL INDUSTRY TREND

OUTLOOK FOR 2022

If the past couple of years have taught us anything, it’s that the rental industry is resilient. Here are my predictions for this year.

I think the rental industry is poised for growth in many areas of the country. Of course, some rental companies located in depressed market areas and those in areas that have too much competition may continue to have more modest gains. Also, those companies clinging to ineffective practices will inevitably yield below-average results.

My customers have experienced excellent gains in 2021 and are positioning their companies for continued growth and prosperity in 2022. Even so, most of them have serious concerns about the current direction of the country and doubt our nation’s political leadership’s ability to handle the economic, social and international challenges we face.

I am concerned about potential conflicts with increasingly hostile nations (such as Russia, China and to some extent North Korea). Even though we have had less-than-cordial relations with these countries for decades without drastic consequences, we may have conflicts in the future that could be surprisingly severe (with a corresponding negative effect on our economy). I hope I’m wrong, of course.

Perhaps surprisingly, I am positive and upbeat about our country’s future and our industry! Our country’s culture of success, the unique nature of the rental business, the tenacity and hard work of the people who own, operate and work for rental businesses have all combined to pull us through every time.

I also think the rental industry is poised for more competition. You are not alone in your awareness of the strong need for rental equipment in our country and the gradual effect that growing housing, remodeling and infrastructure spending will have in our country. The growth and underlying financial strength of equipment rental companies will be noticed by your competitors. For some rental companies, this can be the cause of increased concern and worry, while those who wish to be acquired may view this as an opportunity to sell their companies for a higher premium.

I believe stronger-than-expected growth for progressive, independently owned and operated rental companies is likely. I also think there will be more independents who will be actively seeking to grow their rental companies through starting or acquiring another location in a nearby community (but outside of their traditional territory).

And finally, another trend that I foresee for 2022 and beyond is the emphasis rental business owners will place on greater employee effectiveness and efficiency. The need in these areas has been great for some time but because of company “growing pains” and the vastly increased competition for quality help, I have seen increased demand for this type of training for employees and managers.

Relatively low interest rates, moderate inflation, continuing building and remodeling demand, the shortage of construction equipment available for purchase and increasing infrastructure spending all point to considerable potential for rental companies. Remember the importance of remaining positive and focused on moving forward.

©BoonritP – stock.adobe.com

Dick Detmer is a nationally recognized consultant, lecturer and writer with 40+ years of experience in the equipment rental industry. In 2018, he celebrated the 30th anniversary of his business, Detmer Consulting Inc., and his column in Rental. Dick can be contacted at dick@detmerconsulting.com, (309) 781-3451 or by visiting his website www.detmerconsulting.com.