CONSTRUCTION EQUIPMENT RENTAL MARKET ANALYSIS

The global construction equipment rental market size was valued at US$ 221.7 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 5.1% from 2023 to 2030. Several factors are driving this growth. These include the need to reduce capital expenditure, a growing trend towards renting, and increased productivity gains offered by modern digital platforms. The construction equipment rental market is growing on account of increased demand for residential buildings and commercial construction. The demand is also increasing due to a surge in global infrastructure projects. 

Global Construction Equipment Rental Market: Regional Insights

Asia Pacific is expected to show substantial growth in the global construction equipment rental market during the forecast period. This can be attributed to growing development of construction and infrastructure in the region due to focus of governments on development of infrastructure for growth of the economy. Moreover, the number hydropower projects, Special Economic Zones, construction of highways, dams, airports, and subways in the region is increasing supporting the major industrial activities. This in turn is driving the demand for construction equipment rental services in the region, which is further likely to boost the market growth across the region.

North America is also anticipated to show growth in the global construction equipment rental market over the forecast period, owing to robust presence of several major rental service providers. Moreover, the manufacturers are entering rental business for gaining market share in the region. As the region is one the major exporter of used and novel equipment globally, the global construction equipment rental market is likely to witness growth opportunities in the coming future.

Figure 1. Global Construction Equipment Rental Market Share (%), By Region, 2022

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Global Construction Equipment Rental Market Drivers:

High cost of purchasing construction equipment to boost the market growth

The initial cost involved in purchasing construction equipment can range from US$ 5,000 to over US$ 10,000,000 varying from smaller lifting equipment to larger cranes. Furthermore, the cost of essential accessories and attachments increases the overall cost of equipment. Along with this, after purchasing, the owner has to invest in regular maintenance of the equipment as it is used in major wear and tear environments. Furthermore, owner also has to hire maintenance teams, mechanics, and consultants to maintain their fleets. Thus, all these factors make procurement of construction equipment expensive, due to which demand for rental services of these equipment is increasing. This factor in turn is expected to fuel growth of the global construction equipment rental market over the forecast period.

Rise in advancement of rental equipment technology to boost the market growth

Advancing technologies such as infotainment and ADAS are contributing significantly in enhancement of driving experience and increasing safety as well as security of operations of construction equipment. Many rental service providers have upgraded their fleet and offer features such as latest telematics solutions for improved productivity, fleet management, and use of available manpower and equipment. Telematics systems offer connected onboard sensors and diagnostics with the GPS systems for tracking equipment. Thus, such various benefits of advanced rental equipment technology are expected to boost growth of the global construction equipment rental market over the forecast period.

Global Construction Equipment Rental Market Opportunities:

Low penetration of rental services in developing countries to create ample opportunities in the global construction equipment rental market during the forecast period. Rental penetration is important for assessing the opportunity in terms of current market versus potential market. The low level of penetration indicates significant opportunities for expansion of rental service businesses for the companies, in such regions. Thus, this factor is likely to offer lucrative business opportunities in the market over the forecast future.

Technological advancements in heavy machinery to create growth opportunities in the global construction equipment rental market over the forecast period. With increasing technological developments in automotive and heavy equipment industries, various new openings are created in the construction equipment rental market. Manufacturers of construction equipment are focusing on assimilation of cutting-edge safety aspects such as lift assist, 360-degree camera views, and auxiliary work lights for improving the productivity of their operations and reducing the need for maintenance. As a result, the market is witnessing multiple opportunities in the global construction equipment rental market.

Global Construction Equipment Rental Market Trends:

Growing strategic acquisitions among market players is a major trend

Leading players in the market are increasingly engaging in strategic initiatives such as collaborations, acquisitions, and strengthening product portfolios to gain a competitive edge in the global construction equipment rental market. For instance, in September 2022, H&E Equipment Services, announced to have acquired One Source Equipment Rental, an Illinois-based company. With this acquisition, the company took a step further toward its geographic expansion in the market. Thus, this trend is likely to aid in growth of the global construction equipment rental market over the forecast period.

Increasing application in commercial sector is another trend in the market

Increasing demand for construction equipment is leading to rise in application of construction equipment rental services in commercial sector. Commercial properties are creating lucrative openings for equipment manufacturers to boost their business in terms of product sales and rental services. Along with this, government of several countries are introducing infrastructure plans, which is further driving the demand for heavy equipment. Thus, this trend is anticipated to augment growth of the global construction equipment rental market over the forecast period.

Global Construction Equipment Rental Market Restraints:

Unstable demand of construction industry to hamper the market growth

Several non-residential and residential construction projects are major source of revenue for the market. The market clearly relies significantly on construction activities in special region. Thus, declining construction activities create challenge for the global construction equipment rental market. For instance, according to Coherent Market Insights, during 2006 to 2013, the construction sector exhibited a decline of 37%, which further impacted the market for heavy construction equipment. Thus, such factors are expected to hinder growth of the global construction equipment rental market over the forecast period.

Lack of qualified and skilled professionals to hinder the market pace

Heavy machinery for construction can be highly complicated due to which it requires qualified and skilled operators, as they can prevent accidents as well as enhance the overall productivity and performance of the machinery. With unqualified operators, there can be fatal accidents at construction site. Several emerging countries are facing lack of such qualified and skilled operators, which is further impacting adoption of these equipment. As a result, this factor is anticipated to impede growth of the global construction equipment rental market in the near future.

Figure 2. Global Construction Equipment Rental Market Share (%), By Machinery, 2022

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Global Construction Equipment Rental Market Segmentation:

The global construction equipment rental market report is segmented into machinery.

Based on Machinery, the market is segmented into Earthmoving machinery, Material handling machinery, and Concrete & road construction Machinery. Out of which, Earthmoving Machinery is expected to dominate the global market over the forecast period and this is attributed to the rise in road, high-rise, and bridge construction. Construction activities of larger infrastructures are increasing all over the world due to which the demand for earthmoving equipment is increasing for this application. This in turn is expected to drive growth of this segment.

Material Handling Machinery segment is also expected to witness significant growth in the near future and this is owing to the increase in demand for construction equipment for industrial application and growing industrialization. The focus on increasing output is increasing among industries for minimizing capital expenditure involved in material handling machinery. Thus, the demand for material handling machinery is increasing, which is driving growth of this segment.

Global Construction Equipment Rental Market: Key Developments

In June 2022, Sunbelt Rentals and Britishvolt announced partnership for supporting the development of first ever full-scale Cambois-based battery Gigaplant for Britishvolt. Under this partnership, both the companies will be able to work on developing battery solutions for heavy equipment and power plant.

In April 2021,General Finance Corp. announced a definitive agreement with United Rentals for acquisition of General Finance Corp. by United Rentals. This agreement involved US$ 996 million transaction.

In June 2020, H&E Equipment Services Inc. relocated its Georgetown branch to an expanded unit in Texas.

Global Construction Equipment Rental Market: Key Companies Insights

The global construction equipment rental market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global construction equipment rental market are Ramirent, AKTIO Corporation, NISHIO RENT ALL Co., Ltd., AB2000, Cramo Oyj, Ahern Rentals Inc., Byrne Equipment Rental, American Equipment Company, Inc., United Rentals, Inc. (acquired BlueLine Rental), and Ashtead Group plc.

*Definition: A construction equipment rental service is a business that offers the use of machinery and vehicles to customers. Moreover, it also offers training on operating the rented equipment to make the users feel comfortable with their new tool and confident in using it at work. It is one of the largest segments in the equipment industry.