Rental business expected to grow
By Staff -- Industrial Distribution, 4/1/1998
Oak Brood, Ill.--Bullish construction equipment distributors are spending more to beef up inventories in anticipation of stronger rental sales this year, two recent surveys show.A construction industry forecast by The CIT Group/Equipment Financing of Livingston, N.J., found that distributor-dealers expect a rise in income from rental equipment, particularly heavy equipment. The survey, published by the Associated Equipment Distributors, is based on interviews of 900 construction executives nationwide.
The forecast reports that distributors expect a 12 percent increase in profits, led by more private projects and residential building. Forty-three percent predict increased construction activity, while only seven percent expect decreases.
"What we're seeing is a renewed faith in the construction industry," says Robert Merritt, president and chief executive officer of CIT/EF.
More optimism comes from another survey of 269 equipment dealers by Construction Equipment Distribution magazine. By geographic region, dealers in the northeastern U.S. have the brightest outlook, with 58 percent expecting higher sales than in 1997. Just over half the dealerships in the south and Midwest look for increased sales, while southwestern companies were split on whether volume would exceed last year's.
Equipment dealers in the western part of the country were the most cautious as 48 percent expect lower sales. Canadian companies were evenly split, according to the survey, which was conducted late last year.
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