The global construction equipment rental market is anticipated to value at 136.5 billion with a CAGR of 4.9%, according to a new report by Grand View Research Inc. The construction rental equipment market is expected to witness a steady demand owing to infrastructure development and shifting trends in the consumer market.
Rise in project costs is leading to the procurement of construction equipment on rental basis and this lead toward saving of overheads and additional costs and quarterly losses. Many big companies rely on third-party vendors to collaborate for construction ventures. Therefore, widespread adoption of rental equipment on contract basis is one of the major trends in the market. Material handling segment is expected to retain its dominance as earthmovers held a high accountability. For example, mining sector holds a huge demand for earthmovers as compared with commercial construction. The growing popularity of heavy machines with enriched features is anticipated to boost the market growth.
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Covid-19 Effect:
Amid the novel coronavirus pandemic, the construction market is set to make a comeback as economies resume to operate gradually. The construction sector was badly hit in the first quarter of 2020. However, there are recovery signs in the market as laborers are returning to operations site and construction activities are gaining a gradual momentum. The markets linked with the construction domain are also experiencing a similar phase on account of outbreak and partial lockdowns imposed by the governing bodies.
Further Findings From the Report Suggest:
l Earth movers accounted for a high CAGR in the recent years and continue to dominate in the forecast period. The demand for earth movers has tripled in the past few years based on rise in construction activities
l Material handling segment is anticipated to register a positive CAGR in the forecast period owing to the presence of key players
l Asia Pacific is the dominant market for construction equipment rental and mainly driven by increase in investment in the construction sector
l The key players are emphasizing on reopening of markets with resumption of business activities in full swing with safety measures
Based on product, the construction equipment rental market is categorized into material handling machinery, earthmoving machinery, and concrete and road construction machinery. Earthmoving machinery emerged as the largest segment by product. Widespread adoption, mobility and ease of operation, and the high cost of excavators are the prominent factors that make rental of such equipment a preferable option. The earthmoving machinery comprises of loaders and excavators prominently used for application in the agriculture, construction, and mining sectors. Material handling machinery such as trailer mounted crane, truck mounted crane, and crawler crane is anticipated to gain market share by 2027. The growing popularity of these types of machines owing to features such as high lifting capacity, high rigidity, and better transportability has fostered market demand. Additionally, the growing trend of high-rise buildings and mega infrastructure schemes is anticipated to give a boost to the demand for these types of machinery on rental basis.
The emergence of new technologies including digital services for automated service improvements, equipment service tracking, and mapping features has been an ongoing trend within the market. The adoption rates of construction equipment are increasing in the rental services owing to the technological enhancements provided by the original equipment manufacturers.
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Renting construction equipment not only saves the cost of buying new equipment but reduces the incurrence of expenses such as labor cost, maintenance cost, and operational costs. The cost of timely maintenance, repair, and checking is also avoided. Construction equipment rental companies perform all these tasks regularly, to gain long-term profit from the machinery. These companies are now also focusing on providing onsite services and support for equipment, which further enhances customer experience. Companies such as Caterpillar Inc. offer quick response teams to help customers at remote locations through mobile servicing vans.
Major Players:
l Arshtead Inc.,
l Aggreko Inc.,
l Herc Rentals Inc.,
l United Rental,
l Aktio Corp
The procurement of new construction equipment often requires high down payments and investing a large portion of capital from the operating expenses of the company. Interest on loans, insurance cost, licensing cost, storage cost, and taxes are the overhead costs involved post-purchase of the construction equipment. Equipment owners are also accountable for transportation between job sites. On the other hand, if the company procures the equipment on a rental basis, the responsibility of providing the equipment to new work sites is with the provider and the company using it does not bear the direct overhead cost. Furthermore, the rental companies often upgrade their fleet of equipment and machineries on a regular basis, providing its customers with upgraded and most advanced equipment.
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The market for construction equipment rental is highly competitive and concentrated, with the top five companies accounting for the maximum share of the global revenue in 2019. Ashtead Group; United Rental; Aggreko; Herc Rentals Inc.; and Aktio Corp dominated the market. Addition of new equipment to the existing fleet and mergers and acquisitions are some of the strategies adopted by the key players to maintain their market share. Technologically advanced and fuel-efficient products are expected to be a critical parameter for being competitive in the market for construction equipment rental.
Grand View Research has segmented the global construction equipment rental market on the basis of product:
Construction Equipment Rental Product Outlook (Revenue, USD Billion, 2016 – 2027)
- Earth Moving Machinery
- Material Handling Machinery
- Concrete & Road Construction Machinery
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.
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