Oil drove equipment rental market rise: StatsCan

Oil and gas sector drove increase in equipment rental sector, Statistics Canada reports.

Operating revenue for the commercial and industrial machinery and equipment rental and leasing industry grew 10.6% from 2013 to $11.5 billion in 2014, according the latest analysis released Friday by Statistics Canada.

This increase was partly due to continued growth in 2014 stemming from the oil industry, which is a major client of heavy machinery rental and leasing services.

During the same period, operating expenses were up 9.4% to $9.6 billion, raising the operating profit margin from 15.5% in 2013 to 16.4% in 2014.

Salaries, wages, commissions and benefits totalled $2.1 billion in 2014, up 8.5% from the previous year. They accounted for the largest share of the industry’s operating expenses, at 21.5%, followed closely by the cost of goods sold (20.5%) and amortization and depreciation (19.1%). The cost of goods sold includes the procurement of equipment to rent and lease. Shares for the top three expense categories have been fairly stable over the years.

Sales to other businesses comprised 87.9% of total sales in 2014, while sales to individuals and households accounted for 5.7%. Sales to government, non-profit organizations and clients outside the country made up the remainder.