Equipment rental and leasing prices increased in October as the Federal Reserve’s rate cuts had a positive effect on the industry.
Truck, trailer and RV rental and leasing prices rose 3.7% year over year in October, reaching an index value of 128.8, according to Equipment Finance News’ equipment pricing indexes.
Rental and leasing prices for construction, mining and forestry equipment rose 0.4% YoY, finishing at an index value of 105.8, according to EFN’s Pricing Index for Trucks, Truck Trailers and RV Rentals and Leasing.
Pricing Index for All Equipment Rental and Leasing
(Courtesy/Bureau of Labor Statistics)
Prices increased YoY in the truck, trailer and RV rental and lease pricing index despite mixed results sequentially. The truck, trailer and RV rental prices index landed at 124.6 in October, up 2.3% YoY, while the truck, trailer and RV leasing index finished at 127.8, up 4.7% YoY, according to EFN’s Pricing Index for Trucks, Truck Trailers and RV Rentals and Leasing.
Pricing Index for Trucks, Truck Trailers and RV Rentals and Leasing
(Courtesy/Bureau of Labor Statistics)
EFN developed the two pricing indexes for commercial equipment rental and leasing to provide indicators for industry pricing trends, using data from the Bureau of Labor Statistics. The indexes, which aggregate data back to December 2008, are updated monthly.
Market outlook
With the Fed cutting interest rates another quarter percentage point on Nov. 7, policymakers believe inflation is headed toward targeted levels. Still, inflation has affected rental pricing and leasing as the industry balances rising prices with consumer demand, United Rentals Chief Executive Matthew Flannery said during the company’s Oct. 24 earnings call.
“We continue to have cost inflation that we’ve been absorbing throughout the last couple of years, so the need to continue to drive rate[s up] is certainly there and, probably more importantly, the discipline in the industry is there,” he said. “The industry is creating good value and giving a good output for the customer, which is the most important part of allowing yourself to get price increases.”
Increased front-end and input costs drove up prices throughout the year and contributed to price pressures in the market, Kevin O’Connor, sales director at Northbrook, Ill.-based Beacon Funding, told Equipment Finance News.
“Everything costs more, on the front end, new equipment, all the parts, the components, the labor, everything increased. Therefore the ultimate sale price increased and, for awhile, there was such a shortage of equipment on the secondary market, so those prices went up too,” he said. “Supply caught up with demand here in 2024, which caused a reduction on the secondary market, not so much on the primary market.”
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