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Mixed Signals Ahead for Truck Rental Demand

March 19, 2012, 07:30 AM
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Topic: Rental News

Low freight activity and a down housing market decreased demand for truck rentals and leases during the recession, but the industry is set to pick up over the next five years according to IBISWorld’s report on the Truck Rental Industry.

As the residential housing market improves and businesses require more trucks for freight activity, demand for truck rentals will revive. Furthermore, many businesses will find it more cost effective to rent trucks rather than buy ones as a result of increasing emissions regulations regarding trucks.
 
The Truck Rental industry has endured a difficult five years to 2012, with the recession putting a significant dent in demand. Low freight activity and a down housing market decreased demand for truck rentals and leases during the recession.
 
According to IBISWorld industry analyst Antonio Danova, the silver lining for the industry was that the low freight activity and tight credit conditions caused fleet operators to significantly underinvest in heavy truck capacity. Instead, fleet operators were inclined to rent rather than buy until market conditions improved. In addition, 2010 emissions regulations for heavy trucks have further raised vehicle prices, increasing the relative affordability of truck
leasing options.
 
Despite these positive trends, revenue is still expected to decline slightly at an average annual rate of 0.8% to $16.4 billion over the five years to 2012, though recent advantageous positioning will result in revenue growth in 2012.

To read IBISWorld’s full report on the Truck Rental Industry (purchase necessary), click here.

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