It’s a scenario no equipment rental company can afford: A big construction project comes to a halt because a rented air compressor or power generator breaks down. And because of supply chain bottlenecks, replacement parts are a long time coming. Every sidelined piece of equipment is revenue and opportunity lost.

The construction market in general has recovered strongly from the COVID-driven slump of 2020, and despite declines in pipeline construction in the United States, forecasts for 2022 are bullish for many key sectors, including non-residential. That doesn’t include the federal government’s $1 trillion infrastructure spend, signed into law in November, which should give an even bigger boost to 2023. Equipment rental companies will grow right along with construction to nearly $65 billion by 2025, according to a December 2021 survey by Research and Markets.

The global market research firm reported that the U.S. equipment rental market is expected to grow at an annual rate of 5.47, between 2021 and 2025, citing such factors as rising oil and gas production and employment growth as key drivers. According to Research and Markets, there is a substantial growth in the number of rental service consumers as contractors and dealers are opting for rentals to reduce the size of their fleet and lower the complexity in organizations.

With so much opportunity ahead, expect the rental industry to gear up accordingly, investing heavily in fleets of revenue-producing machines. The payoff for that investment depends on how well the equipment holds up in the field and how quickly maintenance issues can be resolved. Overall Equipment Efficiency (OEE) is the metric that will determine whether an investment is smart or regrettable.

Often that boils down to components, because when a compressor fails, it’s not the whole compressor that fails, but part of it. It benefits major rental companies to specify, as part of their initial orders, components that last longer and can be quickly replaced. The good news is, when manufacturers are competing for their business, buyers have more influence than they may think.

Before placing that big order, rental companies should review with the original equipment manufacturer not just the entire unit but what goes into it.

For a successful build-to-order strategy, the key issues are:

For large rental companies, the stakes simply are too high to take whatever components the equipment manufacturer wishes (for its own reasons) to use. Time is money, and when a single, diesel-powered compressor can rent for more than $700 a day, downtime is the enemy.

By all indications, a healthy construction market will provide a robust period of opportunity for equipment-rental companies in the years ahead. Insisting on quality, standardized components with strong supply chains and support is the best way to make sure that no opportunities are missed.

Daniel Mega is an Industrial Machinery Specialist at Emerson Automation Solutions, working with customers on how best to achieve their automation and fluid control goals. He joined Emerson in 2017. This article was originally published by the Association of Equipment Manufacturers (AEM).

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