Construction Equipment Trends in 2019

Throughout this year, construction analysts have been closely watching key indicators to judge the health of the construction industry. Trade wars and perennial labor shortages have been a drag on the sector overall. Nationally, residential construction spending has been trending downward in 2019, while non-residential spending has held steady. Within the non-residential sector, data shows that private non-residential has slowed this year while public non-residential is still seeing some growth.

With public and private commercial construction still occurring, our Builder’s Risk policy provides protection for contractors and owners against property losses. From coverage for temporary structures, forms and scaffolding to Equipment Breakdown and fire protection equipment, we help eliminate the need to purchase additional policies. Read more about our Builders Risk coverage here.

The construction equipment market mirrors general trends in the construction sector overall. In the first half of the year, many equipment manufacturers identified a decline in demand for new equipment. The big rental firms, buying fleets, are a key customer of the manufacturers. The acquisition strategy of fleet managers can be pressured by price. A number of factors have impacted the price of new equipment this year, including tariffs and technology. Manufacturers are building tech into the machines to both offset emissions and improve machine monitoring capabilities.

Despite a slowdown in buying new equipment, however, the rental market, driven heavily by trends in the non-residential sector, seems strong. The American Rental Association (ARA) updated its 5-year forecast in August. The ARA says the market for rental equipment remains positive, despite the slowdown in the industry. For 2019, the association is estimating that equipment rental revenues will be close to $56 billion, up 5% from 2018. Surveys of rental equipment dealers indicate that quoting activity remains consistent, despite the softening in the market. Although not as high as it was in 2018, the price of used equipment has rebounded in recent months.

Look around a construction site and do a quick calculation. There could be millions of dollars of equipment that are owned or leased on the site at one time. Significant losses due to theft, accidents, vandalism, fire or other causes are possible. Our Contractor’s Equipment coverage is a highly flexible policy that helps to provide protection for expenses that are often overlooked. For additional information, check out our following marketing materials.

North American Rental Revenue Expected to Exceed $71 billion in 2023, American Renters Association, August 19, 2019

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