Challenging economic headwinds put equipment investment strategies to the test

Electro Rent outlines how companies can combat the impacts of the current economic challenges and mitigate risks set out in several recent reports from prominent industry commentators. In light of current economic conditions predicted by numerous recent reports, electronic test equipment specialist Electro Rent has advice for any companies looking to mitigate this financial pressure when sourcing the equipment they need.

The argument in favour of test equipment rental is already compelling and growing in favour across the industry spectrum, but in uncertain economic times, there arises even more need to replace legacy-based purchasing strategies with a smarter way forward.

With economic headwinds driven by factors such as higher costs, inflation and geopolitical uncertainty, the EU’s recent forecast report outlines the potential impact on new investment: “Heightened uncertainty around the unfolding of the geopolitical situation and its impact on the demand outlook are set to weigh on companies’ investment decisions and delay the realisation of investment plans.”

A May 2022report by Deloitte Insights already warned that “the negative effect is particularly pronounced for companies’ operating margins, which are under pressure from a higher cost base due to rising energy and commodity prices”. In June 2022, the OECD’s Economic Outlook said that growth is set to be markedly weaker than expected in almost all economies. Many of the hardest-hit countries are in Europe, which is highly exposed to current market challenges, including the impacts of the energy crisis and inflation. All of this could impact on accessing the electronic test equipment that companies require, on time and on budget.

More and more companies are therefore turning to rental test equipment as a cost-effective yet reliable means of meeting the requirements of budget-conscious, lead-time restricted projects. Renting not only provides immediate access to the latest test equipment technologies from all major brands, but it also keeps projects on track and avoids the typical risks associated with capital expenditure, such as a large hit to balance sheet liquidity, asset depreciation and slow return-on-investment. Renting also allows companies to easily ramp up and down in line with demand. Moreover, those renting can change their test equipment whenever necessary, providing the flexibility to support an ever-evolving industrial and economic landscape.

Electro Rent has extensive experience in advising customers on solutions that help them navigate different financial situations in a safe and effective way. Based on over half a century of managing test equipment investments - amid a broad spread of economic trading conditions - the company knows how to supply this equipment in a flexible manner, minimising the potential consequences of an economic downturn and keeping test schedules going without the need for capital investment.

“The key is maintaining business agility and ensuring sufficient flexibility to deal with fluctuating economic conditions,” explains George Acris, Vice President Marketing EMEA at Electro Rent. “High-end electronic test equipment is available that many are not even aware can be procured on a rental basis. For example, by using Electro Rent, customers can deploy the latest spectrum or network analyser for a high-frequency test just for the period required. No more, no less.”

Companies can achieve this ambition simply by paying as they go from their operating budget. As a point of note, it is possible to rent equipment of this type for periods as short as one week. Moreover, the equipment is available immediately, which is a huge advantage in the current climate of long lead times, avoiding any frustrating project delays that can derail product launch dates.

“Many companies in defence and electronic goods development, as well as those in telecom installation and maintenance, for example, are already using this concept effectively and saving an average of 25% on their equipment costs while being able to deploy as needed,” says Acris. “This strategy is a proven way of keeping pace with the latest test equipment technologies, retaining total flexibility to adapt and react in line with economic uncertainty.”

Evidence is building from expert commentators that economic challenges continue to lay ahead for some time to come, so now has never been a better time for companies to look again at how they procure equipment. Electro Rent has some very effective options available to help mitigate any challenges that the economy may present moving forward.

For more information, visit https://www.electrorent.com/uk/services/lease-and-finance

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