Industrial Equipment Industry

Industrial Equipment Industry

The most significant trend in the industrial equipment industry at the moment is the continued rise in the percentage of revenue within the industry that is generated through rentals as opposed to purchases. There are currently eight thousand companies that offer industrial equipment rental and together they generated forty three billion dollars last year in the US alone. The preference towards renting as opposed to buying industrial equipment is expected to continue to rise in the coming years as the global economic crisis shows little concrete signs of improvement and therefore many companies simply do not possess sufficient capital to purchase expensive industrial equipment outright.

The Size of Rental Companies within the Industrial Equipment Industry

The rental aspect of the industrial equipment industry is incredibly concentrated with the largest fifty companies generating over fifty percent of the revenue each year. Such companies are able to benefit from economies of scale and can therefore offer rental rates that smaller companies would find it difficult to profit from. Though to an extent this offers a barrier to entry for those wishing to enter the industrial equipment industry via the rental market, smaller companies can still make successful entry provided they specialise in specific areas where there is less competition and can offer superior customer service.

The Equipment Most Likely To Be Rented Within the Industrial Equipment Industry

Thirty five percent of the rental aspect of the industrial equipment industry consists of the rental of heavy construction equipment while industrial equipment such as aircraft, tugboats and railroad cars makes up another twenty percent. Only five percent of this aspect of the industrial equipment industry is made up of office equipment and computers.

The Average Rental Company within the Industrial Equipment Industry

The location of the majority of rental companies within the industrial equipment industry is confined to the outskirts of towns within industrial zones and they rarely operate any form of store front facilities. On average premises tend to be around three acres and will consist of a storage yard for the equipment that they rent, a maintenance centre as various offices to handle administration. The majority of rental agreements are then processed either online or over the phone.

Will This Industrial Equipment Industry Trend Continue?

Many experts agree that the proportion of the revenue generated within the industrial equipment industry that is down to rentals will continue to rise until the global economic situation improves. Many industrial equipment suppliers that solely sell equipment have lowered prices in order to increase sales, however the capital is simply not available to many companies and therefore rentals remain the only option regardless of such price cuts.

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