Construction Equipment Rental Market Trends

Growth Drivers

• High Infrastructure Development Investments - Infrastructure development helps a nation in multiple ways. It helps enhance the manufacturing competitiveness of the nation. High manufacturing competitiveness is expected to bring in more investment, create more jobs, and thus boost growth in several sectors, which are the building blocks of the country's economy. For instance, the government of India announced a raise in capital expenditure for infrastructure development in 2023-24 to an amount equivalent to USD 122 billion in its Union Budget 2023. This raise also included the highest to date outlay for railroads, which amounts to USD 29 billion

• Large-scale Implementation of Infrastructure Development Programs - The large-scale implementation of infrastructure programs aims to connect different parts of the world, open new trade routes, and simplify international trade. One such initiative is the Belt and Road Initiative by China. This initiative aims to accelerate economic growth across central and eastern Europe, Asia Pacific, and Africa by addressing the infrastructure gap between these regions. As of July 2022, up to 150 countries had officially agreed to join the Belt and Road Initiative (BRI) by China. Further, as per predictions by experts, China should spend up to USD 9 trillion over the life of the BRI.

• Growth of Residential Construction Projects in Developed Nations - The market for rental construction equipment is expected to witness growth as a result of the flourishing of residential construction activities in the United States (U.S.) and Europe. For instance, the university town of Tucson in Arizona boasted the construction of over 1499 conventional apartments in 2021. Similarly, about 2,486 square feet was the average size of a house built for sale for a single-family in the United States (U.S.) in 2021.

• Growth of the Mining Industry in Developing Nations in MEA and Latin America - It is estimated that Africa should have more than 210 mining and infrastructure projects in the energy and power sector by 2030. Equally worth mentioning is the presence of Chile and Peru, two of the world's largest producers of copper in the Latin American region. It is estimated that Chile alone held 29% of copper produced globally in 2020.

Challenges

• Adverse Effects of Economic Recession on the Construction Industry - Construction, just similar to many other industries, is one of the most badly hit during an economic slowdown. With the safety protocols during the pandemic, the construction industry struggled poorly, with a shortage in financing, labor, and supply of raw materials. For instance, construction products in the European Union (EU) faced an unprecedented decline of about -26% during March and April of 2020.
• Shortage of Labor Who are Skilled to Use the Equipment
• Fewer Opportunities for Market Growth as a Result of High Rental Penetration