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Construction Industry Forecasting

What are the top challenges facing the rental industry in the next year?

Whenever I ask Rental readers what keeps them up at night, the answer invariably turns to the labor shortage. It’s getting increasingly difficult to find qualified job candidates who want to work with equipment. Contributing factors include a school system that almost exclusively promotes a four-year college education at the expense of technical and vocational training; a younger generation that’s been influenced to prefer white-collar fields to getting their hands dirty turning a wrench; and now a political climate that threatens to diminish the immigrant workforce, which in some areas, is quite significant.

Also challenging is the growing presence of online marketplace rental outfits. These companies, which don’t own equipment themselves but act as a middle man between customers and the rental companies that serve them, have the potential to transform the way we think about equipment. On the bright side, it could permanently cement end users’ reliance on renting as a means of equipment acquisition, which stands to benefit all rental companies, but it could also threaten the foothold that smaller rental companies are clinging to as corporate chains and marketplace outfits gain ground. One thing seems certain, and it’s that all rental companies must become active marketers of their brands and must do so in the way that younger generations expect to receive the message. Effective online and social media promotion are now a must, not an option.

In terms of the next year specifically, rental companies will continue to watch as the Trump administration begins to make its mark on American business. Many have pinned high hopes on increased infrastructure spending and a more business-friendly corporate tax code, but so far there’s been little change of any consequence. Meanwhile, the challenge will be in balancing the desire to be ready in the event increased funding creates more work and more equipment rentals, and the need to conserve enough resources in the event the economy does not grow as expected. Right now, it’s still anybody’s guess which way it will go.

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