One word: Momentum. Momentum accurately sums up how we at Takeuchi felt in 2014 and continue to feel so far in 2015. That same momentum can be felt among the industries we serve. The economy is ascending in the right direction and that is a very good thing for all of us.
Last year was one of the busiest years in recent memory, and that isn’t just because it was a CONEXPO-CON/AGG year. We released several new products last year that were a big hit across the construction, landscape and rental industries.
Not only has Takeuchi felt consistent momentum over the last year, but so too has the construction industry. 2014 offered a solid amount of job creation, including an additional 48,000 workers hired in December to finish the year at a near six year high according to the Associated General Contractors of America. In February of 2015 the construction sector added another 29,000 jobs and the U.S. Bureau of Labor Statistics recently released a report from the CPWR Data Center that construction employment is projected to grow by 29 percent between 2012 and 2022. That would put the number of construction workers in the U.S. at 11.5 million, which is just below the industry record set in 2007, pre-recession.
The same can be said about the rental industry, which recently saw that the American Rental Association (ARA) Rental Penetration Index is up to 53.9 percent. That number is an increase of 100 basis points according to the American Rental Association and IHS Global Inc. The ARA Rental Penetration Index measures the proportion of the total fleet of construction machines that are owned by equipment rental companies. This is value-based and uses original equipment cost as the primary weighting factor to calculate the ratio of rental equipment value to total fleet value. 2014 was the fifth straight year that the index has seen growth since it completely deflated in 2008 and 2009 when it fell to around 43 percent during the recession.
Part of the reason why rental has seen resurgence is that contractors have continued to re-think the use of their investment capital and are still leaning towards rental as an alternative to expanding their fleet. Equipment rental demand has been growing at a rate of at least three times that of our general economy over the past few years and is forecasted to increase to 8.1 percent, reaching $38.5 billion.
We witnessed firsthand just how much buzz is going on in the rental industry when we went this February to the ARA Rental Show in New Orleans. It is our favorite tradeshow every year and one that we look forward to. This year was again a very successful outing for us. I always enjoy seeing our dealers and customers at the show and it is great to catch up with them. I felt like there was a lot of energy at this year’s show, even more so than last year. At the Takeuchi booth we had constant foot traffic and a lot of people were excited about the new products that we introduced last year that were at the show for the very first time. Those products included the TL8 compact track loader as well as the TB230 and TB240 SERIES 2 excavators. While our skid steer lineup has been on the market now for a few years, they also have continued to gain popularity and were a big hit at this years show as well.
The Takeuchi brand is in higher demand than ever before, and we are gaining new customers and dealers at a growing rate with overwhelmingly positive reviews of all our machines. Recently, we have heard many stories about customers changing their entire fleet over to Takeuchi and that is something we are incredibly proud of. We are pushing to grow the Takeuchi brand even more in 2015 and know that we cannot accomplish that by resting on our laurels, but rather continuing to put in the hard work and standing by our principles as a company.
From all of us at Takeuchi, we would like to send a sincere thank you out to all of our customers and dealers. Things are certainly going in the right direction and we are happy and thrilled to be along for the ride.