A report from Standard & Poor's Rating Service (S&P) said U.S. equipment rental companies could be hurt this year by declining construction spending.
The industry has fared well over the past two years, but S&P said it expected downgrades in the sector due to a drop in capital expenditures for construction equipment, Dow Jones reported.
Infrastructure spending spurred by President Obama's economic recovery plan could offset declines in commercial construction, but S&P said nonresidential construction spending may have peaked after growing by double-digit increases since 2003.
Equipment rental companies have been forced to cut jobs and lower costs because of the economic recession. RSC Holdings last month reported a 53 percent drop in net income for the 4th quarter, while United Rentals said it suffered a net loss on a $911 million write-down, according to Dow Jones.
However, Hertz Holdings, which owns and operates one of the world's largest equipment rental businesses, said it had reached an agreement today to purchase certain assets of Advantage Rent A Car for approximately $33 million.
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