Wednesday, 2 September 2015

Capital Equipment Rental Remains One of the Biggest Industries

Thousands of start-ups are currently under construction and a thousand more are projected to materialize in a year or two. Along with this, there comes a high demand for heavy equipment for construction.

However, instead of buying heavy machineries which can be outdated overtime, many companies prefer to rent equipment from reputable sources in order to cut cost and ensure fully maintained heavy machineries.

Many rental companies across Asia have admitted to increase in revenue since the start of 2015, and the sustained increase of sales within 7 months of this year’s operation. Those with an increase include even mediocre sustaining construction and rental company, Axis Capital Group and have the greatest impact to stock market’s darlings, Komatsu and Deere&Co.

Companies have been aggressively pushing their way to the top and have been tightening their machineries. The biggest market review in Asia includes that of the developing city, Jakarta, Indonesia, Singapore and Hong Kong.

According to many analysts, the high demand for heavy equipment rental trace back to the 2008 economic breakdown. Because of the uncertain economic outlook, renting heavy machineries seems the best option. Some construction companies are also hesitant to buy new machineries since emission control standards have boosted prices by 15% - 20% on prices of more sophisticated filters and other gear for the pollution reduction.

In the United States of America, 54% of rental profit comes from heavy machinery market. It also remains as one of the biggest industries in dire need of operators and workers. Jobs related to this industry may be a little bit tough and risky but it pays well. In the present times, there’s a lot more confidence but capacity expansion is slightly muffled by a lack of drivers. In this particular issue, a warning was released by analysts that the growth of the industry may waver when the number does not increase.
Companies are currently unthreatened by this debacle while the growth of the industry still promises big potential. The lack of manpower is being resolved through mass hiring and higher compensation.

Another reason for the recent shift toward new equipment relates to technology. Through ergonomic joystick controls, quick-change attachment couplers, and cab designs that lessen operator fatigue, technology has made earth moving machines more comfortable for operation while simultaneously bolstering the versatility and efficiency of the machines themselves. 

There is more to expect in heavy equipment’s future. What that is and how it can be realized are yet to be discovered.

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