Owners have increased their outlays for construction equipment, with capital expenditures improving to $22.1 billion in 2003, after posting lower numbers in 2001 and 2002. The upward trend is expected to continue through 2004, when construction equipment expenditures are forecast to surpass the recent high in 2000 of $23.2 billion. And 2005 could be even better. (The “Construction Equipment Capital Expenditures” bar chart plots this purchasing information for a seven-year period.)
Outright purchasing of equipment is reserved for those flush with cash, such as large corporations or the government, and that portion of the market doesn’t appear to have changed, according to the survey.
Typical contractors don’t often have that sort of large cash reserves available, so their best options traditionally have been leasing or renting. As an alternative to buying, these two approaches allow contractors to get into equipment they otherwise wouldn’t be able to afford, and use that equipment to make more money. Basically, leasing is a long-term mechanism, whereas renting is for a short-term need.