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Balancing high volume and profit constraints in the upper Midwest

By Brock Huffstutler

December 1, 2023

Doug Haas

Doug Haas

“Everybody I’ve talked to has had a good year as far as volume, and revenues have been coming in as expected or even better on some fronts,” says Doug Haas, president and CEO, Crown Rental, Burnsville, Minn., and American Rental Association (ARA) Region Six director, about how rental companies have fared during 2023.

Despite that silver lining, the cloud for now and heading into 2024, according to Haas, is the rising cost of doing business. “Profit levels are down because the cost of doing business has gone up,” he says. “Some of this is tied to wages — to keep their help, everybody has had to give raises. And then there are equipment costs. In the last two years a lot of equipment has doubled in price.”

Haas says the stream of projects funded by the 2021 U.S. infrastructure bill has benefited heavy equipment rental operators across the region. “The bigger players have been helped by that money coming into the market,” he says.

A DIY/general tool rental trend that is being seen in other parts of the country also is taking place in the upper Midwest. “When compared to 2020 and the first half of 2021, it’s dropped back,” Haas says as he offers possible reasons for this. “People are going back to work, there is no longer the federal money coming in that a lot of people used for improvements around the house, and people are able to travel again and not stuck at home working on their backyard. I also think a lot of homeowners are starting to feel the cost of living going up and they don’t have that extra cash to do big projects.”

Things look brighter on the event rental side across the region.

“Everybody in the party business says they had a good year and a lot of them even say staffing is back to almost normal again, so that’s a good thing,” Haas says. “Corporate events are back now. Weddings took off super strong after COVID. Backyard parties only quit for a few months, and they’ve been back and have been strong. Staffing is still something event rental companies work on but a year ago nobody could find anybody and now they’re starting to fill the positions.”

While Haas admits to some uncertainty about the overall health of the economy heading into 2024, he says he continues to receive generally positive signals from those in the upper Midwest’s equipment and event rental community.

“Personally, I’m slightly concerned that inflation, etc., might drive us into somewhat of a recession, but nobody I’ve talked to is worried or anything. They’re approaching 2024 just like another year,” he says.