Growth building for construction equipment leasing

The construction equipment rental market is expected to reach $84.6 billion by 2022 according to a recent report from consultancy Research and Markets which highlights a number of key factors behind this trend.

The report notes that the availability of a wider range of modern, productive machinery in rental fleets coupled with infrastructural development occurring at brisk pace is projected to drive demand. Significant factors such as the cost inflation associated with the replacement of equipment and the technical changes pertaining to machinery requirement has positively favored rental demand.

Environmental and safety issues are also making leasing an economical option, the research shows. Further, the considerable shift towards renting over buying due to less immobilized capital, low maintenance, improved cost control and reduction in transportation fleets are expected to boost revenue growth over the forecast period.

Stringent regulations, financial constraints and increasing cost of ownership makes it a considerable alternative for various government authorities, contractors and other users. The manufacturers are aggressively focused on providing tailored solutions and financial packages in order to meet the requirement of individual customers which is further projected to drive growth over the forecast period.

Reduced burden of upfront investment, and eliminated risk of expensive breakdown repairs, is expected to offer lucrative growth opportunities. For instance, over 80% of the machinery sold in the UK goes to the plant hire companies.

The Asia Pacific construction equipment rental market accounted for over 27% of the overall revenue in 2014. Substantial growth is estimated to be witnessed across countries such as China owing to government requirements of state-owned enterprises for operating efficiently from a financial perspective, continued privatization of the industry, increased health and safety regulation and increasing labor costs.