The impact of rising interest rates is being felt in the equipment sector across the Northwest. Steve Ricci, president and owner, Bigfork Rentals, Bigfork, Mont., and American Rental Association (ARA) Region Eight director, says this is both helping and hindering rental operations.
“It used to be that if a contractor wanted, say, a telehandler on his job for a year, he would buy one because it was a better deal. Well, now it is not a better deal because of interest rates, so he is going to rent. We see the benefits of that. But it’s tough, too, because now rental operators need to buy equipment to supply those contractors, and we have to either pay cash out of pocket or pay the high interest rates,” Ricci says.
For those offering both rentals and sales, Ricci says, “Rental is good because interest rates are up, but sales are down because interest rates are up.”
Ricci also says the impact of consolidations are becoming more apparent. “Mine is now the last privately-owned rental company in the Flathead Valley,” he says. “I just see the national chains running the country moving forward. It’s the trend. The privately-owned rental companies will be event rental, because the big chains are not buying up event rentals; they are buying up the equipment side of it.”
Event rentals remain strong across the Northwest, and Ricci says that is lifting equipment rentals too. “From the event folks I talk to locally and abroad, it’s crazy,” he says. “Money is no object for bigger tents and bigger parties which, in turn, generates more rental for us on the equipment side, because we are supplying generators and heaters.”
Even while equipment and event rental activity is healthy across the region, sourcing labor remains a conundrum.
“Labor is the one thing that I haven’t seen an uptick yet on,” Ricci says. “Every single operator — whether it be a national chain or private company — is in the same boat right now. Everybody is all hands on deck with their core employees because there is no labor pool to draw from. Why? I have no idea. But I would tell everyone that you’re not rowing this boat by yourself.”
Despite ongoing speculation about the possibility of a recession, Ricci is generally optimistic about his region’s rental economy heading into 2024.
“I don’t see things diving off terribly,” he says. “I see the economy dipping but still moving forward. I see projects happening around here that are going to go no matter what, with both commercial and housing developments. Contractors are saying that what they have on the books is taking them into the next two years. They are turning down small stuff; they are picking and choosing.”