This is Yengst Associates’ seventh Industry Analysis of the North American rental equipment industry. Our analysis covers 23 major products, all typical machines found at construction job sites, highway projects, quarries and mines and endless other applications. The rental equipment industry is a mature industry. It is cyclical; driven by a number of factors including interest rates, construction spending, housing, non-residential construction and oil prices. The industry has grown to be a major end market for equipment manufacturers, which is one of the primary reasons for writing this report. We estimate that nearly 60 percent of new construction machinery in North America (unit volume) went into rental activity in one way or another and it has been this way for many years.

The rental equipment industry has evolved from being a fledging in the 80’s to a mature one in the early years of the new millennium. Real growth for the industry began in the mid-80’s, hit a few bumps in the early 90’s when North America suffered through a two-year slowing of the economy and experienced a major growth spurt in the 90’s. In the late 90’s there was major consolidation among the various rental companies before another slow down after 2000. The rental equipment industry suffered through some tough times for three years, yet has experienced record growth since 2003. The record growth continued through the first half of 2006 when it started to flatten out due to the effects of the slowdown in the housing market. However, 2006 was a good year for the industry. We expect 2007 to grow slightly over 2006 while the effects of the housing market continue to be felt. As 2008 approaches, if the housing market doesn’t improve there could be trouble in that non-residential construction should be slowing by then.

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