N. American access outlook: Soft landing or deeper dip?

Following a period of robust growth post-pandemic, the North American access industry is preparing for a softening in the coming year, according to reports from JLG, Terex and Skyjack.

Citing economic headwinds such as rising interest rates, inflation, ongoing supply chain issues, adjustments in rental demand and slowing non-res and single-family home construction, North America’s “Big 3” anticipate a decline in sales for both Q4 2024 and throughout 2025.

Genie’s GS scissor range. (Photo: Terex)

“Although investments in infrastructure and manufacturing continue to grow, the rate of growth has somewhat slowed, and we’re seeing local projects being deferred until investors have more clarity on the macro environment,” said Simon Meester, president and CEO of Terex Corp. during a recent investors call. “Another important factor, particularly in aerials, is that lead times for new equipment have come down largely back to pre-Covid levels.

This allows our rental customers to align their equipment delivery schedules more precisely with their requirements. We expect a degree of caution in rental demand through the fourth quarter and into 2025 before returning to a more robust environment in 2026 and beyond.”

Meester’s comments follow the company’s 2024 Q3 results, which saw Genie’s sales grow 2.4% year-over-year to $769 million, and a reported backlog of $1.2 billion.

“The growth at [Genie] was lower than we initially anticipated, as rental customers adjusted delivery schedules during the third quarter to better align with their fleet requirements and shorter equipment lead times,” said Julie Beck, senior VP and CFO at Terex. “We expect to see a sequential volume decline in Q4, mostly reflecting seasonality and fewer working days. The lower volume will put pressure on AWP margins as we reduce production in the fourth quarter.”

Terex is forecasting total Genie 2024 sales to amount to $3 billion, down from its previous forecast of $3.1 to $3.25 billion, citing adjustments in the market as the main factor.

Moderation and margins

JLG also adjusted its full-year outlook, reporting full year sales expectations of $5.1 billion, down from its previous forecast of $5.3 billion.

JLG’s ES4046. (Photo: JLG)

“While we believe mega projects and fleet ages remain tailwinds, pockets of slowing nonresidential construction activity and persistently higher interest rates have been putting pressure on the market,” John Pfeifer, president and CEO of JLG’s parent company, Oshkosh Corp., said during a recent investors call. “Furthermore, we have seen customer demand revert back to more typical seasonality.”

JLG said tailwinds such as significant infrastructure investments, mega projects, data center construction and the need to replace aging fleets will remain as positive factors moving into 2025.

“We don’t think that ’25 is going to be any kind of significant downturn,” Pfeifer said. “We just think the market is going to be a bit soft. We’ll see healthy conditions in the mega projects. We’ll see some softness probably in private construction. And then we expect, after a short-term period, it will continue to grow again.”

Market performance

Despite global unit sales down year-to-date, Skyjack reiterated the industry as a whole is coming down from a historical high in 2023.

“Though non-residential construction, the primary driver of the access market remains robust, the push-out of major infrastructure and mega projects in the U.S. has many of the equipment rental companies delaying or pulling back on CapEx spending after a robust period of re-fleeting that happened during 2023,” said Jim Jarrell, corporate director, president and CEO of Linamar Corp., Skyjack’s parent company. “What’s encouraging, however, is that this is viewed as a temporary pause with modest market growth returning in 2025, and not the start of a more protracted cycle. Though this is certainly impacting demand at Skyjack, we are still outperforming the market.”

Jarrell pointed out that despite Skyjack’s total YTD sales being down -5.9%, “the industry as a whole is down -12%.” The company’s full year expectation is to be down -5.8%, and the global industry to be down -13.3%. Meanwhile, it expects total 2025 sales to be up 2.7%.

“Looking at Skyjack’s business operations, we’re seeing a stabilization of operating patterns following our global manufacturing expansion efforts,” Jarrell said. “Mexico production is achieving improved schedule attainment and previously outsourced fabrications and assemblies are now coming in-house. This will result in improved costs, quality control and logistics efficiencies.”

The company also noted its Chinese facility is now fulfilling all scissor product demand for the whole Asian region, and it is looking to localize boom production in country within the next 12 to 18 months.

Not a downturn, just a soft landing

Despite rising interest rates, project delays, slowing construction activity, economic uncertainties and adjustments in rental demand impacting the North American access industry this year, the Big 3 all see brighter horizons.

Skyjack’s new micro scissors. (Photo: Skyjack)

“This is not the first time we’ve seen channels make abrupt adjustments,” said Meester. “I’m confident that the work we did strengthening our portfolio, fortifying our core businesses, and investing in lower cost operations will enable us to perform better throughout the cycle than we have done in the past.”

Meester added, “All of our customers, especially our larger customers, are reporting strong tailwinds from mega projects. And the smaller customers are perhaps more dependent on local projects. So, no one is really asking to pull anything in, mostly just rephasing towards what their fleets need.”

For JLG, the focus remains on customers and providing solid margins.

“While our access segment is experiencing softer market conditions in North America in the near term, we expect we will continue to deliver resilient healthy margins,” Pfiefer said. “We remain confident in our ability to deliver solid margins even during a period of softer market conditions. We are working with our customers on their 2025 requirements, and we continue to expect meaningful orders during the fourth quarter of 2024 and first quarter of 2025. Overall, we believe the access market will remain healthy over our long-term planning horizon.”

Skyjack echoes these sentiments.

“There’s hope that with the election behind us, it will help to settle some uncertainties and see some optimism surfacing in the U.S.,” said Linda Hasenfratz, Linamar’s executive chairman. “That, as well as interest rates coming down, and some of those mega projects getting back on track, will drive moderate market growth next year.”