I saw this article the other day, and although it’s a few weeks old, and made me think back to all the news articles, which were about this time last year, claiming that there would be a shortage of hire vehicles during the summer season due to the rental companies not being able to afford new vehicles for their fleets.
So, with the news that one of the UK’s largest van hire firms is set to renew 20,000 vans, a third of its fleet, in the expectation that the economy has/will pick up to an extent where the expense is justified, one has to feel that, assuming the money men at Northgate have done their jobs right, this has to be a good sign for the wider economy. Afterall, 20,000 vans are not going to come cheap and, even if the vehicles which are being replaced are so clapped out that they can’t be rented anymore, the implication has to be that the firm thinks it will need a capacity significantly greater than the 40,000 vans which it would have left.
A lot of Northgate’s business traditionally comes from businesses in construction and manufacturing, as opposed to private customers, so the firm’s commitment to renew their fleet strongly suggests that they have confidence in these sectors to flourish over the next twelve months, and if that’s the case then that would certainly be a good sign for the wider economy; particularly when one considers that the construction industry was one of the areas hit hardest by the recession, and the resulting crash in house prices.
Only time will tell whether or not it’s an astute move which will leave them well placed to profit from any recovery we see this year, but they’re by no means the only company to demonstrate optimism over the economy’s near future, and quite often the economy seems to function as much according to expectations as because of any real monetary factors, so, although my tendancy is to be wary, overall I’m thinking that the signs for recovery are looking hopeful.
Tags: economic recovery, van hire
Maybe they were hedging the risk of a further downturn by anticipating that a lot of people would lose their jobs and having to move elsewhere to get work.
Or move house to somewhere they can afford?
And maintenance on older van stock is doubly expensive of course as when the vehicle is in the workshop it can’t earn any money.
Upgrading the fleet looks like a smart move.