The Covid-19 pandemic has skewed acquisition strategies for machinery, according to Derek Betcher, marketing manager at John Deere, as demand for equipment has spiked. In 2021 (and perhaps even beyond), he urges contractors to ensure availability before committing to either purchase or rental.
“[Because of the uptick], we’re seeing particular compact equipment demand, in some cases outstripping how fast manufacturers can produce it,” he says. “So when you consider whether to rent or buy—while this wouldn't ordinarily be the first question you'd ask—I think this year, you first need to ask where you can get the machine.”
Fleets that already own the machines they need will be at an unexpected advantage.
“Purchasing equipment means you don’t have to wait for the right machine to become available or be forced to use what’s available for rent depending on what the rental center has on hand,” says Jason Boerger, marketing manager at Bobcat. “To be more specific, there is less risk of not having the rental equipment when you need it.”
For contractors on the search, Betcher suggests they ask their preferred dealer well in advance if the machine needed is available.
“[They need to ask] if the dealer is getting one soon that they can buy, or do they have a better chance of getting their hands on a rental to complete their project?” he says. “Even then, will the rental company have this machine in stock and ready to rent? I’ve heard many anecdotes this year from rental companies. They’ve had to turn away more rents—and suffered lost rents due to lack of product—than I’ve ever heard before.”
Although general construction in 2020 was slow, manufacturers say the do-it-yourself market “took off” in its place, helping the rental industry recover somewhat from the pandemic’s economic blow.
“People that were spending more time at home and less time on vacation or at the office began to make widespread improvements on their properties,” Betcher says.
Greg Worley, Caterpillar's senior product engineer, seconds this.
“A lot of people are working from home, and timber prices have gone through the roof—so people started doing a lot of construction work at home,” he says. “Early on, that was great.”
But the increased demand reduced inventory. Even into 2021, several rental companies have begun selling machines in their rental fleets.
“In order to do some of this at-home work, people are going to rental companies for machines or for equipment,” Worely says. “There’s actually less rental machines around at the moment. So it’s a good and bad situation that Covid has created, and you can get examples in many different aspects of the construction and home industry. If they’re a rental house that hasn’t sold their equipment, they’re still golden.”
As more jobs are put back online this year, and with increased interest in investing in infrastructure, big contractors will continue to stay busy alongside the companies that cater to them.”
“We haven’t seen any drop off in 2021,” Betcher says. “We are not post-peak yet on any of those segments—both are strong right now. There is no surplus of product inventory, and I think people are seeing that across the industry. That’s why availability should be a big consideration this year.
“If you know you need a machine in August, where you can get one from and whether you're buying it or renting it may be the answer to the question.