Welcome -- Looking forward to 2023
by Clair Urbain, Editor, Publisher
The economic headwinds going into 2023 appear to be just that: increasingly tough sailing as we still deal with equipment backlogs and supply chain issues. The unmet demand for equipment and supplies has instigated higher interest rates as the Feds attempt to chill demand and reduce inflationary pressures.
Rental center managers that I have talked with report unfilled equipment orders that stretch back into the beginning of the COVID crisis. Used equipment buyers are burning up the phone lines and email servers searching for good, used equipment that was formerly easy to find from rental centers.
On the flip side, rental centers are hanging on to equipment longer because new replacements are very hard to come by. In fact, many of them are also looking hard at the used equipment market to find units to either replace their older models or to expand their fleet due to increased demand.
Rental centers have also reported that they are closely monitoring their local markets for price increases by their competitors. From fuel to labor to repairs, it’s becoming more expensive to operate a rental business and those costs need to be passed onto customers.
The Equipment Leasing and Finance Institute recently forecasted a mild recession in mid-2023. It reports for Main Street businesses, the combined effects of high inflation and tightening financial conditions are likely to contribute to turbulent operating conditions in 2023. Fortunately, financial stress is still quite low and small business lending activity remains positive for now.
Fortunately, demand for rental equipment continues to increase as contractors find it more economically sensible to rent vs. own equipment. The challenge for rental centers is to keep present inventory in top working order to meet demand until new models are available in the pipeline.
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