Headlines are causing concern. The state of the economy doesn't quite conjure up images of 1929, but it is not to be taken lightly. Almost every day the business section of the paper or your Internet screen tells of layoffs, corporate downsizing, lack of consumer confidence, manufacturing cutbacks, budget cuts. Certainly none of these are hopeful signs.
But after speaking with many of the RER 100 executives, I am very hopeful about where this industry is going. Oh there is plenty to be concerned about. Rental rates are still dormant in many areas. There are still too many machines chasing too few jobs in a lot of markets, a problem that will only intensify as the slowdown deepens. And this industry has not been immune to layoffs. Many of the top companies are dropping employees and closing branches, leaving some good rental people calling around for jobs. It's a shame to think — after all the talk we've heard the past few years about how hard it is to find good people — that many of them will have to find employment outside this industry. A number of manufacturers are facing shrinking margins as well and I've heard of some very talented equipment people in the past month forced to update their resumes and go job-hunting.
So what kind of positive spin might I be able to put on all these layoffs? This might be small consolation at the moment to the unemployed and their families, but the long-term prospects for employment in this industry still appear very strong. In fact, a recent Labor Department study projects equipment rentals as one of the top ten industries in terms of the fastest wage and salary employment growth between 1998 and 2008, with a probable 43 percent growth rate in this 10-year period.
And what else is there to be hopeful about? Well, start by looking at some of the RER 100 companies. It's impressive to see how many companies have improved and strengthened their rental programs. Some of the companies on the RER 100 haven't even been in the short-term rental business that long, yet their programs are thriving. They — and this includes newer rental players and long-established companies alike — are trying new approaches, expanding the scope of their services, showing the innovation this industry is known for, doing things smarter and better than ever before.
Even the investment community might be taking a new, more positive look at this industry, as their infatuation with all things dotcom fades. Although NationsRent and Neff are having their problems, at press time United Rentals' stock price is more than holding its own and it received a large infusion of capital during a period when most public companies can't raise a dime.
Ups and downs are normal in business. There is much evidence that this downturn will be fairly short term. And those that survive the downturn usually emerge stronger than ever.