A large majority of American Rental Association (ARA) general members responding to a recent e-mail survey are certainly feeling the impact of the current economy. About 75 percent of the more than 600 general member respondents reported a decline in rental revenue in 2009 when compared to 2008. Of the respondents, 20.5 percent said rental revenues are down 30 percent or more. However, nearly 16 percent reported rental revenue increases in 2009 and about 9 percent said rental revenues were flat.
ARA, in a July 9 e-mail, asked general and associate members to voluntarily participate in a brief online survey about how the current economy is impacting the equipment rental industry. General member questions focused on rental revenue and equipment purchasing while a separate associate member survey asked about sales of equipment into the rental channel. The results reflect a snapshot of those who responded and may not be representative of the industry as a whole. ARA plans to conduct similar economic opinion surveys of members on a quarterly basis with the next survey planned for October.
About 86 percent of the more than 150 associate member respondents to the survey said sales to the rental channel were down in 2009 when compared to 2008. More than 38 percent said sales to the rental channel were down 25 to 49 percent and another 19 percent said sales were down 50 percent or more.
Current revenues as well as expected revenues do impact new equipment purchases. Nearly 15 percent of the general member respondents said they have increased new equipment purchases in 2009, 21 percent said spending on new equipment is flat while more than 64 percent said spending is down. More than 34 percent of the respondents said new equipment spending is down 30 percent or more.
A third of the general member respondents expect new equipment purchases in 2010 to be flat while nearly 45 percent expect new equipment spending to increase in 2010 and a little more than 21 percent said spending in 2010 will be down.
Both ARA general and associate members are more optimistic about the future. Of the general members who responded to the survey, nearly half expect rental revenues in 2010 to be up when compared to 2009 with 18.28 percent expecting a 5 to 9 percent increase. Nearly 31 percent expect rental revenues in 2010 to be flat while a little more than 20 percent expect 2010 revenues to be down.
More than 42 percent of the associate members responding to the survey expect sales to the rental channel to increase in 2010 when compared to 2009 while 30 percent expect sales to be flat. Nearly 28 percent expect sales to the rental channel to decrease in 2010.
To survive the recession, more than 80 percent of the general member respondents said they have evaluated and cut expenses, 79 percent said they bought fewer pieces of new equipment, 55 percent reduced staff hours, 54 percent have sold underutilized equipment and nearly 45 percent have reduced staff numbers.
In order to deal with the current industry downturn, nearly 75 percent of the associate member respondents said they have adjusted advertising and marketing expenses, nearly 49 percent have reduced office staff, nearly 48 percent reduced production staff, 44 percent reduced hours of production/operation, just over 43 percent targeted specific rental or different industry segments and just over 34 percent have reduced sales staff.
When asked about the greatest business concern, most general members mentioned the economy, cash flow and government affairs, with many comments along the lines of, “Being able to survive until the economy rebounds.”
The greatest business concern among associate member respondents also was the economy and government policy as well as the credit markets and the financial stability and sustainability of rental companies.