• Sales & Service

    FIND A SALES OR SERVICE PROVIDER


    Or
    Apply filter:
    Sales Service

  • English
  • Sign In
  • OnlineExpress 0

Select Your Region

North America

Latin America

Europe

Middle East

Africa

India

Pacific Rim

Australia and New Zealand

  • Australia and New Zealand
  • English
Industry Trends

From the President: 2022 State of the Rental Industry

Blog Posts - Mar 22

From the President: 2022 State of the Rental Industry

Frank Nerenhausen
EVP and President
____
JLG Industries

After finishing up 2021 strong, all eyes are on 2022, wondering what’s in store for the rental industry.

Heading into the new year, we saw robust demand for access and material handling equipment, and overall, a solid recovery following two years of managing through pandemic-related business challenges.

At A Glance 2022 State of the Industry

This demand is being empowered by multiple tailwinds, including replacement demand, fleet growth and a near synchronous increase in construction and construction-related activities around the globe. Though our sentiment is generally positive, we admit that there are several headwinds we continue to face, including ongoing pandemic interruptions, supply chain constraints, labor shortages and inflationary pressures.

To address these challenges, we are aggressively pursuing multiple initiatives with the intention to establish a more agile and stable business model that supports a longer-term, sustainable recovery beyond 2022.

Many of these initiatives are focused on three big movements, or trends, for the coming year that we see emerging and affecting change across the rental industry.

1) The digitally powered customer

In 2022, the industry will continue to see the evolution of “digitally powered customers.” Access equipment will become increasingly intelligent through integrated control systems and technologies that enable advanced analytics, active safety and autonomous or assistive operation. These types of features improve productivity and utilization to deliver that next percent or two of incremental revenue rental companies and users are looking for. 

Where customers may have resisted new technologies in the past due to concerns around added cost and complexity, we are now seeing fewer of those barriers. Users are more willing to embrace technologies that eliminate pain points and drive efficiencies that provide tangible benefits to their business.

Today, nearly all equipment and devices are connected to the internet, and the associated data is moving to the cloud, making real-time data and information accessible anywhere/anytime. Connected products have really become table-stakes in the Access industry. Expect to see a greater shift towards automation, machine learning and e-commerce over the course of 2022.

2) A shift in focus from fossil fuel consumption towards clean energy solutions

An interest in alternative energy solutions is a growing focus area across many industries, including the construction industry. JLG sees a varying degree of shift towards clean energy solutions with a focus on decarbonization. Europe and China are leading the way, with North America remaining a bit of a lagger. Companies here are beginning to recognize the trend, but in most instances are not fully leaning in. We believe that as pending regulation is passed, and technology becomes more affordable that adoption will accelerate.

JLG has implemented a regionally focused approach to clean energy solutions, leading and investing based on the unique demands and needs of each market. 

3) New ways of working

The COVID-19 pandemic required both employers and employees to find new and creative ways to get work done outside traditional office and job site environments. This required the adoption of both new tools and technologies.

We are seeing a number of companies adopt permanent remote models and abandon office space. Others have implemented hybrid work schedules and downsized their facilities, while others have fully resumed in-person work.

Construction workers are no different than those in adjacent industries in their desire for greater, long-term work flexibility. With so many work-from-home jobs now available, companies are quickly adjusting to retain and attract key talent.

To stabilize the workforce and facilitate this type of work, look for an increase in autonomous and semi-autonomous robotic features that allow machines to be operated or monitored by a skilled tradesperson at a safe distance from the work area; perhaps even offsite. Remote project managers and service technicians may also become more commonplace as new digital technologies and applications facilitate the sharing of real-time job site data and machine diagnostics.

Overall, we expect to see construction company workers become more distributed in 2022.

Many people ask me: “What will be the rental industry's biggest challenges this year, and how will the industry overcome them?”

I have to say that there are a number of significant headwinds that continue to face the equipment rental industry: Ubiquitous supply chain, workforce and inflationary pressures are impeding users, rental companies and OEMs alike.

In 2021, we asked our customers to be patient with us.

We are asking for continued patience in early 2022 as we navigate and develop solutions to mitigate these challenges and safeguard future operations.

While the global supply chain remains constrained, we expect it will normalize over the course of the year. In the interim, we aren’t resting on our laurels. We’ve learned that we need to become more geographically adaptive and agile, and as such are exploring nearshoring opportunities to regionalize our supply chain/s and push towards a sustained recovery. Regionalization of our supply chain is a positive economic move in North America as its additive and will result in localized business and job growth. Our ultimate goal is the stabilize our supply chain without a compromise to product quality.  

Though plagued by ongoing supply chain challenges, there is no evidence to date that manufacturers are unable to supply the equipment that customers need. That said, we have seen behavior shifts as it relates to the timing of fleet planning. These discussions are happening with independent rental companies and national rental companies further in advance to secure the production capacity they need. 

Labor also remains in high demand. Finding talent, retaining talent and keeping talent safe, while being as productive as possible is a hurdle nearly every business will need to overcome in 2022. Companies are rethinking how they attract and retain employees in today’s increasingly remote workplace.

And last but not least, inflationary pressures are something we continue to contend with and are the single biggest threat to today’s robust equipment demand. As supply chain and workforce challenges begin to normalize, we are hopeful that inflation will do the same.

Maintaining a high degree of customer satisfaction amid inflation, supply chain and labor challenges will be something that manufacturers will need to focus on in 2022 as we emerge from what some may refer to as the most chaotic period in our industry’s history.

JLG is focused on communicating clearly and frequently with our customers to manage expectations and provide the information they need to manage their businesses. At the same time, we are investing in the development of connected and autonomous solutions that make it easier to do business with us and reduce the load/gap caused by today’s labor shortage.

We will continue to drive towards providing the most holistic and transparent experience possible to drive customer satisfaction.

I predict that 2022 will be a “transformative” year for the rental industry.

The complex interplay between beneficial tailwinds and challenging headwinds sets the stage for a period of rapid change. Companies will need to rethink the way business is transacted on nearly every level, from how we manage our teams, to the products and technologies we develop, to how we transact business in an increasingly connected workplace.

This pace of change can only be supported in an industry with a healthy ecosystem like rental. Maintaining discipline during challenging periods and adhering to sustainable business practices allows us to continue to invest in and develop the transformational innovations that will drive progress across the industry for many years to come.   

Learn more about trends impacting the rental industry, as well as get valuable, actionable knowledge that will help you rise to your full potential, no matter what your role on the job site, by clicking here.


Do you want to stay up-to-date with industry news and issues similar to this? Make sure you subscribe below to receive monthly updates from #DirectAccess with newly posted content so you never miss important information