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Industry Trends

State of the Industry — 2023 Outlook

Articles - Jun 23

State of the Industry — 2023 Outlook

Tim Morris
Senior Vice President of Sales, Marketing and Customer Support - Americas
JLG Industries

Each year, JLG is asked to provide an outlook on the state of the aerial and rental industries and offer thoughts on the upcoming year. Last year, JLG’s President, Frank Nerenhausen, gave his insights, which you can click here to read.

This year, I had the opportunity to share my perspective on these questions and give you a look into what JLG sees coming next on job sites of the future. Check out excerpts from my interview below…

 2023 Outlook at a Glance
How would you describe the state of the aerial industry? 

Across the board, the aerial industry is very healthy. Following two years of pandemic-related business disruptions, there is a significant demand for access equipment right now, largely due to the recent uptick in infrastructure spending and ongoing fleet replacement activities. Our customers’ book of business is robust, and their operating metrics and key performance indicators are strong. Additionally, we are seeing positive momentum in the supply chain constraints and the competitive labor environment. 

Although the industry continues to work through headwinds caused by rising inflation, logistics challenges and high fuel costs, and nothing is ever guaranteed, we believe that the numerous mega-construction projects going on in the U.S. coupled with the momentum we expect from the infrastructure bill make for a very promising future in the aerial industry.


Are there any trends you’re seeing with aerial lift equipment? 
Over the past few years, the aerial industry has navigated unprecedented times, and as a result, the dynamic on today’s construction job site has changed, new megatrends have surfaced and businesses have had to reinvent themselves to be prepared for the future. 

When we look at what was impacting our industry pre-pandemic (2015-2020), we identified five key drivers:
• Global Marketplace
• Productivity Imperative
• Sharing Economy
• Digital Future
• Urban World

Baked within these top five trends was urbanization, the phenomenon of more and more population moving to urban centers, which was driving demand for product electrification and an overall shift to clean energy. Customers may have resisted these technologies in the past due to concerns about added cost and complexity, but users and regulations are driving more immediate change. Advances in technology have made these solutions more affordable, and as a result, adoption has accelerated.

Moving forward, we see these trends continue to drive the aerial industry, but we also see new megatrends emerging for the five years following the pandemic (2021-2025), including:
• Shifts in Growth and Trade
• Stronger Societal Deal
• Accelerating Disruption
• Digitally Powered Customer
• New Ways of Working

What inspired these trends?

Taking a closer look at the five new megatrends mentioned above, here’s what’s inspiring them…

Shifts in Growth and Trade
Over the last few years, the world has seen a tremendous shift in economic power. Before the pandemic, the construction industry had become largely dependent on suppliers from a few key countries, which ultimately exposed several long-term risks.

Post-pandemic, it has begun moving towards region-for-region supply chains to create a more diversified supply base, including suppliers from mature, developing and emerging countries, a step toward the industry’s long-term evolution.

Throughout the changing climate of the construction industry, JLG has looked to new technologies and emerging trends to remain competitive — our ultimate goal is to stabilize our supply chain without compromising product quality.
Stronger Societal Deal
Sustainability has been at the forefront of product development for quite some time, with the world moving toward electric vehicles, clean energy and reducing gas and noise emissions. While being more environmentally friendly could be considered the focal point of the movement, other initiatives, such as increasing efficiencies and improving productivity, are equally as important.

To meet the demands of these geopolitical issues, the construction equipment industry has shifted its intentions and goals, focusing heavily on sustainability, with the aerial market expanding its own narrative.
Utilizing sustainable resources as much as possible in the design, manufacture and marketing of eco-friendly products will help companies that need more “green” solutions to meet new legislation and regulations on emission reductions.
Accelerating Disruption
Technology acceleration, creation and utilization have all been at the forefront of the digital boom. 

One of the advancements changing construction today is augmented reality (AR), a technology that superimposes a computer-generated image on a user's view of the real world, thus providing a composite view. While AR can be used with tablets, helmets or glasses, construction professionals can utilize this technology right from their phones.

The hunt for autonomous machines and technologies is not new. In the construction industry, autonomy can aid in repetitive construction tasks that may result in an overuse injury. Now more than ever, manufacturers are searching for ways to boost safety and efficiency using automated solutions.

Today, there is substantial observation happening at the job site level to identify the “jobs-to-be-done” that semi-autonomous and eventually fully autonomous equipment will be the solution for. There’s still a lot of work to be done in this area before we see the mainstream use of fully autonomous solutions.
The Digitally Powered Customer

These days, everything is connected to the internet, including equipment and other construction-related devices. Because of this, all the associated data is moving to the cloud, making real-time data and information accessible anytime and anywhere.

And technology isn’t stopping, these tools are only continuing to grow in popularity. In fact, many consider the job site of the future to be about two-way, interactive communication. Two-way communication links equipment to operators, remote third parties and other machines on the construction site to automate certain functionalities, speed [up] documentation, deliver information for crews to make faster, more accurate decisions and enable technicians to access information that increases machine uptime.

New Ways of Working
Consequences of the pandemic have forced dramatic changes throughout the construction industry, like new safety protocols, a workforce shortage and demand outpacing supply.

As a result, businesses have had to reinvent themselves to be prepared for the future. That reinvention has led to a new influx of remote and hybrid work. In fact, with the ever-present labor shortage and skills gap affecting the industry, the rise in working remotely has caused an increase in the pool of qualified candidates, as well as shrunk it considerably as workers want more flexibility to look outside the industry.

This has inspired many businesses to invest in technologies that inspire close connection and virtual meetings, as collaboration has proved to be key in remote work. Employees, regardless of age, need digital capabilities to help them thrive — opening the door for innovative new tools and technologies.

As these new megatrends pave the way for the job site of the future, JLG is committed to being at the forefront of this transformation, pushing the boundaries of possibility and redefining what’s possible. To learn more, download our whitepaper “5 New Global Megatrends Impacting the Industry” by clicking here.

What have been some of your rental company customers’ primary concerns/challenges?
Our customers are facing many of the same challenges as customers in other industries: Supply chain constraints, labor shortages and increasing costs. At the same time, the demand for equipment is so high right now, which has created added challenges for them. 

But as I stated earlier, the book of business is very strong for our customers, and the construction market outlook is increasingly positive. Key indicators suggest that the market will remain healthy as we move through 2023 and in 2024. In fact, one of the indicators JLG follows is the average fleet age of rental companies, which is currently not at desired levels for our customers. We see them actively investing in new equipment, which is driving positive market momentum.

How did the past year go for your company? 
It was a year of learning and evolution. We encountered many challenges that we had not faced historically. For example, cost containment was the biggest issue, just like it was for other manufacturers. 

But, we remained focused on taking action to satisfy our customers and being great partners — two things that have remained paramount in our 54-year history. We have worked diligently to maintain supply and satisfy the market demand. We created many new efficiencies across our operations and worked to share the absorption of increased raw material costs. 

Overall, it was a strong year for JLG, and the momentum we gained in the second half of 2022 is carrying us into 2023 with great energy.

What are your expectations for the next year?

As I mentioned earlier, the future of the aerial industry is very promising. Our forecasts indicate that 2023 will be a much better year than 2022. As supply chain dynamics trend more positively and the labor market continues to level out, we are anticipating a very busy year. 

At the same time, we are making strategic investments in our manufacturing infrastructure across existing and new locations. The investments will help meet customers’ equipment needs in the near and long term while also improving the work experience for the JLG team members who build our equipment. 

These activities will help us continue to maintain our leadership position in the aerial industry and be great partners to our customers.

For a look at how the rental industry has changed from 2020-2021, click here. For a look at how today’s state of the rental industry compares to 2022, click here.

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