John Scott, owner and managing partner, First Source Equipment Rentals, Burlington, N.C., and American Rental Association (ARA) Region Three director, sees strength and optimism in the construction rental segment across the Southeast.
“There are a lot of projects going on,” he says. “It seems like all of Region Three is fairly busy as long as you’re in some larger construction equipment with the bigger aerials and things like that.”
Scott offers a few reasons why the construction segment holds strong across the region.
“It’s just a little easier to do business as far as developments and taxes,” he says. “We still have a lot of open land that’s available to turn into developments. Huge warehouses are being built up and down the interstates from Florida to North Carolina. It also seems like housing is a little cheaper. Some of our customers have sold their homes in other areas and moved down here and they’ve got money left over.”
While the region enjoys an influx of investment on the commercial and residential side, Scott says DIY/general tool rentals are softening.
“That has slowed down for a couple of reasons,” he says. “No. 1, people don’t have the additional income to do stuff around their homes like they did during COVID. Interest rates between 7 and 8 percent — where two years ago you could get a home equity line for 3 percent — has slowed DIY down. And No. 2, I think there are people who are not as competent now to do DIY projects, so they’re hiring people. And then there are less-superior products that you can go buy very inexpensively instead of renting them. A lot of small stuff has phased out of rental houses.”
Event rentals around the region have been steady, according to Scott, but he also says, “You’re hearing that customers are getting sticker shock on what weddings and small events are costing. Over the last two years, event rental operators have finally been able to up their prices to where they probably need to be, but customers have been used to a certain price. We’ve heard of some companies going up 10 or 20 percent, which is awesome, but people are making their events a little smaller.”
One looming concern that could impact all rental segments in the Southeast is the possibility of severe weather caused by El Niño, which is forecast to be extreme through spring 2024. “It might hit our area harder than it has in the past couple of years. We’re a little cautious on how winter will be,” Scott says.
Despite market uncertainties surrounding rising interest rates and the potential for weather-based havoc, Scott is optimistic heading into the new year. “Rental is always going to be a thing. It’s strong and there are a lot of great business operators inside of ARA. We just need to keep doing what we’ve been doing for years which is adapt and change as the market does,” he says.