Commercial construction continues to be the driving factor in the strength of the construction equipment rental market, according to a new report from financial services company TD Cowen.
“Non-residential construction equipment rental rates remain strong, although commercial office continues to be pressured,” TD Cowen, the research arm of TD Securities wrote in a new report. “We are still in the relatively early innings of the tailwinds” from a number of positive signs in the economic recovery, it said.
TD Cowen, in surveying a variety of sources including individual equipment rental companies as well as national data gathering organizations, noted that “Our recent checks largely affirm the favorable non-residential construction conditions, although some cautionary signs do exist.” It said that the backlog in the infrastructure category ticked up again, reaching 9.3 months back to May 2022 levels.
Its report cited new data from the Associated Builders and Contractors that “revealed that the construction industry added 25,000 jobs in May, while construction unemployment dropped to 3.5%. Nonresidential construction employment expanded by 22,100 positions sequentially and 3.4% year-over-year.”
Still, TD Cowen’s report says we remain in the relatively early stages of any projected recovery. “Perhaps the gist of the discussion is continued demand resilience in the face of a tough macro.”
