US construction spending “more moderate” says H&E

The CEO of H&E Equipment Services in the US said the company was expecting a more moderate level of construction activity, with curtailed spending by smaller contractors in particular.

Brad Barber, CEO of H&E, commenting as the company released its second quarter results, said; “We reiterate our view of a more moderate level of spending and project starts as the construction industry continues to transition to a lower level of activity compared to levels in 2022 and 2023.

“Higher project financing costs and more stringent lending standards have led to curtailed spending, especially among smaller contractors.”

However, he added that mega-project and infrastructure activity continued to grow; “H&E’s participation in these projects continues to rise as the company fully leverages its increased scale in the US.

“Mega projects are a meaningful growth opportunity for H&E and our industry, and given their size and long duration, they provide a more stable base of demand in support of key industry fundamentals.”

Total revenues in the quarter rose by 4.5% to US$376.3 million, with rental revenues up 6.5% to $275.5 million. EBITDA profits of $173.2 million were 2.8% higher than the same period in 2023.

The company has opened 23 new locations in the past 12 months, and six alone in the second quarter, expanding its presence in the Southeast, Gulf Coast and Mid-Atlantic regions.

The company has not scaled back its fleet capital expenditure plans for 2024, with gross spending of between $350 million and $400 million expected this year. It has already invested $196.5 million of that in the first half of the year.

H&E and the importance of US mega projects A strategic shift in 2021 has born fruit for this American rental firm now looking to capitalize on demand from the latest growth market