Source: UBS Securities LLC
Rental rates continue to trend up despite challenging business conditions; used equipment pricing deteriorated significantly in July
Business conditions deteriorated; rental rates up m/m
In addition to our construction activity and online pricing analysis, we conducted our latest rental equipment branch manager survey in early to mid-August, with most questions focused on July. Construction activity improved in July as ~25k jobs were added (+3.0% YoY +20bps m/m). Online pricing shows rental rates up 7.3% so far YTD (~+200bps since the last survey).
Our latest survey results, while representing a small sample that may not be indicative of the broader market, were more mixed.
Business conditions weakened in July (score of 3.75 in July vs 3.68 in June; <5 = deterioration y/y, and >5 = improvement y/y).
Rental rates improved in July on a sequential m/m basis (score of 5.25 in July vs. 5.53 in June) for the average branch.
Used equipment prices deteriorated significantly m/m (score of 3.27 vs. 4.70 in June).
Weakening demand indications in the survey, coupled with improving price indications could reflect capex cuts.