As we already know that the construction industry is very vast, and it would have so many challenges. Equipment shortage in the construction industry is one of the biggest challenges. Heavy equipment is a blessing for the construction workers as they make the hard tasks easier and faster. The shortage of them may cause different trouble such as delayed project delivery, risks of having accidents due to certain factors, and a greater number of workers would require to perform the task.
The pandemic has certainly caused serious damage to the construction industry in terms of supply chain grumbling and restricting construction projects. However, the biggest construction projects are getting back on track slowly. The investors, and government plan to bring up some larger projects. these plans are a good sign for the construction industry as it seems to get a feed again. These projects are also supposed to produce employment opportunities.
Although, these are the good signs that the construction industry is growing with positive and exciting trends. But it still has some serious concerns on its way such as supply chain issues. Experts think that this supply chain issue will stretch out to 2023 in almost every sector be it material supply or used equipment such as used forklift trucks for sale.
In this article, we are going to discuss some facts and challenges the construction industry has in its way.
Did the Pandemic Cause Equipment Shortage?
It is not difficult to blame the pandemic for every little loss. It is, indeed, an unjustified statement over every problem. At some point, the pandemic made things worse, but now everything is getting back to normal. Many other factors such as labor shortage, Material Price increase, shortage of equipment parts, and increased shipping cost has been responsible for the damage. These issue has also caused the problem to manufacturers in almost every industry.
The shortage of equipment is still an influential issue, especially in the areas where the construction industry is normalizing or even getting better such as North America. According to the AEMs and OEMs, the supply chain issue is hitting the business very severely. They further stated, if the supply chain issue gets resolved, we could have made more business than usual. Because the demand has increased surprisingly high. Equipment suppliers or manufacturers are running out of products due to the delayed or restricted shipment which is the main reason that they could not meet the demand of the customer.
AEM stated that another factor of increased equipment demand is that many fleet owners and rental companies are going to replace their machines as they are getting older and need more maintenance. Due to the increased prices in almost every sector, the maintenance cost has also increased drastically. So the aging equipment is causing no profit to the fleet owners and rental companies.
Experts think that the shipping prices and material shortages will get better and normalized in the coming days. But it is very uncertain to claim anything at this point. Because the trends in the construction industry is very unpredictable.
Is It a Good Idea to Rent or Own the Equipment During Shortage?
Well, no one can answer it certainly as it is a matter of preferences and the status of your company. However, the fleet owners and rental companies should consider some necessary approaches during crisis. So that they cannot land on the losses. It is necessary to understand the market flow and trend very deeply. You should follow and consider the market reports and expert’s insights very deeply before taking any action.
Is it Worth Buying Heavy Equipment?
To understand this question, you first need to analyze your business need and the already existing equipment in your fleet. You should also look for the requirement of the project for which you wish to buy equipment. If your fleet already has the equipment that can fulfill the need of the project then it is useless to invest in another machine.
Keeping this fact in mind that the equipment demand has increased as a lot of construction projects are aligned by different investors and contractors. However, the OEMs are not able to meet the demand due to the supply chain issue and price hikes. Further, the fleet owners are selling out their aged machines which is also increasing the demand for equipment. If you are going to purchase any equipment these days, you might face a delay in delivery which may also cause the construction project delay.
Any purchase in these days may cause the maximum fluctuation in the cost of equipment. Because the demand is higher than the supply so it increases the prices. Although, in this case, renting equipment is another option to consider.
Is it Worth Renting Heavy Equipment?
According to the current market situation, fleet owners and equipment rental companies hold their equipment for a little longer. It was not that necessary before the pandemic but now the owners of machines has to do so. Due to this long hold of the machines, very less equipment enters the rental market. This long hold also creates a shortage of equipment.
If you are looking for equipment for your next project, it is a good idea to rent it out for now. You can find different trustworthy dealers who deal with used equipment too such as used forklift trucks for sale. But before doing so, check your inventory if you can use your already existing machine with suitable attachments or not. The renting of equipment should be for short time. As long as you keep the machine, you may see a high cost of rent and maintenance as well.
The construction industry is huge and so faces the challenges often. After the pandemic, the construction industry, along with every other sector is facing a massive problem with the supply chain be it material or equipment. Fortunately, the construction industry is getting back to normal after the drastic resistance to pandemics. Hence a lot of new and larger projects are aligned. Whereas the demand for the equipment is still an due to the restricted supply chain and increased price hikes. In this case, a contractor should take the decision based on the market situation so that they may not fall into a loss.
Luckily, the market is expected to come back to normal soon and hopefully, everything will get back to the line by 2023.