The fall season brings a lot of great things – cooler temperatures, beautiful foliage, and last, but not least, the start of the football season. The sweltering heat is gone, much to the delight of construction workers as well as the equipment they operate out on the jobsite. It certainly is a great time of year and as 2014 nears an end, there is much to be optimistic about as the construction industry starts to gain traction and is back on the upswing.
It is important to know and understand what is going on in our industry. I find myself checking in monthly on Chicago Pneumatic’s two major segments: construction and rental. Currently, it is hard not to feel a great deal of optimism and excitement about the industry. Sure, we still have work to do in the construction segment, but it has a much better outlook than it has over the last several years. Then there is the rental segment, which is incredibly strong and is projected to climb even higher over the next few years.
There is no doubt that construction is the backbone of our great country. It’s surely been a tough few years, but we battled through it and as the economy starts to pick up, so too does construction. The unemployment rate in the U.S. is currently sitting at 6.1 percent, the lowest it has been since the recession. Nonresidential building construction is up 3.1 percent since July 2013 and residential building construction is up 8.9 percent. The jobless rate is a little higher in construction, meaning we still have an uphill battle, but as of August, that rate was down 1.4 percent compared to August 2013. Obviously, summer is the busiest time for nonresidential building construction, so as we get closer to winter, numbers will fluctuate and may fall gradually, but clearly progress is being made.
Meanwhile, not only is the construction industry growing strong, but so is another major sector, the rental industry. According to the ARA Rental Market Monitor, the equipment rental industry in the U.S. is expected to generate nearly $36 billion in revenue and outpace gross domestic product by more than four times in 2014. IHS, a global research firm, forecasts total equipment revenue in the U.S. to grow 7.6 percent this year, 10.5 percent in 2015 and another 10.2 percent in 2016 to reach nearly $44 billion. Over the next five years it is predicted that rental companies will invest more than 30 percent of their revenue in new equipment.
Looking back on The Rental Show back in February, I could feel the excitement and optimism for the industry. The Rental Show is one of the few shows where manufacturers are able to sell products right off the trade show floor and we found it to be a very successful event for us. Although the prospect of winter isn’t fun, we are very much looking forward to being in New Orleans for The Rental Show. And, although football will unfortunately be over by then, The Rental Show made headlines when they named one of the best players in the NFL, Peyton Manning, as the keynote speaker. When you can get an NFL legend and five-time NFL Most Valuable Player as your keynote, it’s pretty clear that things are going in the right direction throughout the industry.
As a company, our customers are always at the forefront of everything we do.
At Chicago Pneumatic, we are building a platform of strength, and now have a structure in place to serve our customers more professionally than ever before. As an industry leader, we bear the responsibility for continuously improving our processes and our products – and helping our customers be more productive and profitable. Thank you for the confidence you’ve shown in us and for your support in growing our share of the rental and construction markets. Onward and upward.