Rental companies, to which contractors have increasingly turned to avoid making long-term capital purchases, also are feeding the inventory buildup. United Rentals Inc. expects to spend $775 million this year to meet demand and buy down the age of its fleet, which dropped to 46.6 months in September from 47.7 months in December 2010. Meanwhile, a 7.5% annual increase in rental rates and a 15% increase in rental volume contributed to United posting third-quarter rental revenues of $604 million, or 19% more than last year. Renting is now the norm.
"Everybody's keeping as much cash around as they can," Manfredi says.
Heavy-duty trucks also are getting long in the tooth. The average age of a Class-8 truck on the road is 6.7 years, well over a historic high of 6.2 in the early 1990s. Ideally, a fleet should be between 6 and 6.2 years old, analysts say.
"We've had multiple years of deferred capex spending, but yet we continue to use that equipment," says Steve Tam, vice president of commercial vehicles for Columbus, Ind.-based ACT Research. "We are in a situation where we almost get a sort of pent-up demand." Class-8 truck sales this year are expected to rise 24.3% to 214,000 units, with the vocational-truck segment posting nearly 51% gains.
Used machines are in demand, too. Late-model trucks, Tam notes, are worth 25% more than a year ago, even as average mileage has gone up. Likewise, equipment appraiser Rouse Asset Services says used heavy-equipment values keep climbing. In September, values were approximately 7% higher than in the spring.