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Heavy Equipment Trends: Rentals Are Up, New Equipment Is Preferred and Adaptability Is Key

A new whitepaper, “Tech Innovations Drive Increases in Heavy Equipment Leases and Rentals,” published by Purchasing.com, highlights trends and analysis from an in-depth survey of business owners, managers and procurement professionals spanning a four-year period.

The report builds on findings from two time periods: January 2011 to August 2012, and January 2013 to August 2014. Respondents were asked the same two questions regarding their heavy equipment purchasing preference:

  1. How do you plan to finance your machines?
  2. Do you have a preference for a new or used machines?

The research team analyzed more than 71,000 responses related to the financing and condition preferences of heavy construction machinery to provide decision-makers and suppliers with an in-depth look at past purchase activity and insight into future trends.

The whitepaper shares the following conclusions.

Rental preference has soared in popularity

Companies and individuals continue to make use of multiple options when financing heavy equipment, including leases and rentals as well as outright purchases on wheel loaders and similar machines.

Although leasing continues to be the top financial option for construction owners (with 59 percent of participants choosing it in 2013 to 2014), decision-makers are increasingly renting construction equipment more than in the past. Overall, rentals increased 75 percent in 2013 to 2014 in the survey, with specific equipment categories enjoying even larger jumps in rental frequency—including requests for renting forklifts that went up 90 percent, wheel loaders that went up 273 percent and compact track loaders that went up 925 percent.

Multifunctional equipment is becoming more important

Track loaders are also at the center of the second trend: more requests for multifunctional equipment that is adaptable to a variety of tasks.

Through ergonomic joystick controls, quick-change attachment couplers and cab designs that lessen operator fatigue, technology has made earth moving machines more comfortable for operation while simultaneously bolstering the versatility and efficiency of the machines themselves.

These innovations resulted in cost savings to the consumer by allowing individuals and smaller businesses to purchase a single machine capable of performing a wider variety of earth moving tasks. This cost-effective adaptability led to increases in requests for new skid steer loaders (up 5.3 percent) and excavators (up 2.1 percent) between the initial survey (2011 to 2012) and the follow-up survey (2013 to 2014).

The variety of technological innovations within each subcategory also had an impact on consumer interest and sales. Taken as a whole, these advancements enabled operators and crews to significantly reduce the time and labor required to complete associated jobs, and extended the productivity of a single operator. For example, radio remote control systems and remote monitoring were noted as two advancements in earth moving equipment that helped influence the shift in requests for new machines.

Compact track loaders are being used to replace larger single-function items such as bulldozers

Increasingly preferred for the cost-saving versatility they provide, compact track loaders took a leap in popularity among buyers (up 69.6 percent) due in large part to their ability to accommodate an extensive selection of tools and accessories.

Notably, there was also a 52.8 percent decrease in the number of bulldozer requests between parts one and two of the survey, dropping from 2,199 to 1,037 requests.

Over the years, compact track loaders have increased their value due to performance improvements and a high range of adaptability. Lifting capabilities and an all-terrain ability to go in more places have made them a good alternative to skid steer loaders whose steel tracks limit the environments they can operate in without damaging sensitive surfaces.

In the survey, 15 percent of respondents indicated the desire to rent compact track loaders. This represents a 400 percent increase from 2011 to 2012. The short-term nature of many of these jobs may explain why some buyers choose to rent them.

Add to that the fact that, on average, the initial purchase price for a compact track loader is between 20 percent and 35 percent more than a comparable piece of equipment (e.g., a skid steer) due to the additional undercarriage components on a track loader. Ownership expenses, including maintenance and repairs, can elevate the operating cost to between $30 and $40 per hour for a compact track loader. In comparison, renting the same piece of equipment can cost as little as $20 per hour without factoring in the cost of the operator (largely based on the model selected).

Companies are more likely to purchase new equipment versus used

Overall, individual products have seen drastic fluctuations due to a number of economic, industrial and technological changes affecting purchase decisions. Year after year, technological advances improve machinery, enabling it to better assist the operator through enhancements to comfort and safety. In doing so, these machines increase the level of operator efficiency, helping companies beat deadlines and budgets.

These developments also had a direct impact on another major shift: Companies began requesting new equipment over used machines during this four-year period.

  • From 2011 to 2012, there was a 31 percent increase in requests for new equipment.
  • From 2013 to 2014, there was a 5 percent decrease in requests for used equipment.
  • Machinery most affected includes wheel loaders (up 5 percent), skid steer loaders (up 5 percent) and excavators (up 2 percent).

The complete whitepaper and its background research is available to download.

2 Replies
  1. This is valuable information for the heavy equipment industry including rental companies. Investing in new equipment can be very expensive but companies should think of the long term benefits of getting one. New equipment in the market provides more performance, adaptability, and safety. I think these factors count a lot when it comes to production and profitability.

  2. There is a certain draw to new technology that I think no one can deny; even for equipment. If the pros out weigh the cons, which are usually an increase in costs, then there is seemingly no reason not to upgrade to the newer materials. When I worked with machinery, I was always glad when something new was added to our “tool shed”–if I can call it that– because it made work simpler, and more efficient; not to mention safer. It is usually a good idea to upgrade whenever possible.

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