Most equipment categories are on track for a steady sales climb in 2015, but uncertainty in specific end markets—road construction and mining, for example—could bog down sales of larger machines, such as cranes and haul trucks, analysts say. Contractors are expected to continue supplementing existing fleet capacity with short-term rentals, putting pressure on suppliers to have the latest models on their lots next year.
"Uncertainty in the marketplace is really good for rental companies," says Bryan Bassett, vice president of sales and marketing for Flex Fleet Rental. The Salt Lake City-based startup, which specializes in renting 4x4 pickups to jobsites, plans to double its fleet next summer by adding 1,000 new vehicles. Two new pickup models are on its radar: "Next year, the hottest trucks will probably be the aluminum-body Ford F-150 and the Ram EcoDiesel half-ton," Bassett explains.
The rental boom is inspiring firms to explore new strategies and markets in a sector that is expected to climb 12% next year, predicts Frank Manfredi, a Cocoa, Fla.-based equipment analyst. United Rentals this year started up United Academy, whose online training courses aim to boost safety and productivity for workers using rented machines.
Hertz Equipment Rental Corp. plans to celebrate its 50th anniversary in 2015 by separating from its parent company in a public offering to raise $2.5 billion and launching a new, yet-to-be-announced brand identity. "There are a lot of positive associations with the rental-car side," Lisa Farrar, HERC's newly installed senior director of marketing, told ENR during a December interview. "On the equipment side, if you are a contractor, you know who we are. But we would like to make sure that everyone knows who we are through this rebranding exercise."
Solid housing growth in the U.S. will likely contribute to 15% annual unit increases in the small-earthmoving categories, such as loader-backhoes and skid-steer loaders, while mobile cranes will suffer from anemic transportation spending, according to Manfredi. Globally, "North America is standing up and doing better than the rest of the world," he says. "It's like looking at a nail in a board, waiting for the hammer to strike." Wilton, Conn.-based analyst Chuck Yengst predicts a more conservative 7% to 8% annual growth in equipment. "People are finally getting more optimistic about the future, but there is still a lot of foot-dragging," he says.
Capacity constraints and rising freight rates should translate into more purchases of highway tractors next year, while continued low fuel prices could drive added shipments, says Steve Tam, vice president of Columbus, Ind.-based ACT Research. Construction trucks are also moving.
"The construction segment has been a little more leery about the strength and staying power of economic growth than their manufacturing counterparts," Tam says. "Nonetheless, they are expected to experience admirable growth in 2015 as more projects are put in place, demanding more new equipment."