December 1, 2023
It’s been almost four years since the pandemic shut down the world economy. Recovery has been slow in many areas and there have been many changes in the way we live and work. The hybrid work schedule is here to stay for better or worse. It tends to create better morale amongst employees, reduces office expense and gives employers a larger pool of potential employees to draw from. It also reduces commute time which helps reduce environmental pollution and gives employees more family time. On the flip side, office occupancy space in many of our major cities is still at less than 50 percent. This, in conjunction with many residents moving out of these same congested cities, has had a ripple effect on their economy. Many of the businesses that were dependent on the “office population,” such as restaurants, bars and convenience stores in these downtown areas, are now closed. Also, the jobs they created are gone along with their tax revenue and the traditional 40-hour workweek signed into law by President Franklin D. Roosevelt during The Great Depression. The shift to convert many of these empty office buildings into residential apartments has already begun, creating an opportunity for new small businesses and the equipment rental industry.
There are several other opportunities for equipment rental companies to take advantage of in 2024 starting with the American Rental Association’s (ARA) new online forklift certification class due to be released in March and the adoption of ARA’s Standard Equipment Taxonomy (SET) for the rental industry — let’s all call it the same thing. The use of ARA-provided industry analytics and artificial intelligence (AI) allows you to make better decisions for your equipment rental business. ARA’s continually growing library of courses and certification classes available through RentalU helps you train and retain your most valued asset, your employees.
2024 will bring with it a level economic forecast. It is a presidential election year and with steady interest rates by the Federal Reserve due to the slowdown in the jobs market, slow growth is expected. By the end of the year, we may see a reduction in the price of goods as inventories continue to grow. Some of the national rental companies may put a cap on new equipment purchases as they value their current fleets after two years of expanded growth through acquisitions. City, state and federal infrastructure projects will continue to be the lifeblood of growth in the equipment rental industry as private construction projects continue their slow growth pattern. As I mentioned last year, the homeowner market has stagnated and will continue to do so through 2024 due to the current interest rates and market pricing that has created a lack of available inventory. This affects the rental industry with a lack of remodel and landscape work that the resale of homes brings.
As the deadlines approach for the conversion of gasoline-, diesel- and propane-powered equipment to “clean energy,” be sure to check out the ever-increasing supply and type of alternative fuel machines at The ARA Show™ in New Orleans, Feb. 18-21, 2024.
Robert H. Pedersen is president, A Tool Shed, Santa Cruz, Calif., and the American Rental Association (ARA) Equipment Rental Shared Interest Group co-chair.
