Underground Construction - December 2019 - 8

NEWSLINE LATEST INDUSTRY DEVELOPMENTS
Contractor Guilty
of Manslaughter in
Boston Trench Collapse
A contractor who prosecutors said pushed his
crews to work faster on a behind-schedule
project has been convicted of manslaughter
in the deaths of two workers in a 2016 Bostonarea trench collapse.
A Suffolk County Superior Court judge convicted
Atlantic Drain Service owner Kevin Otto of two
counts of manslaughter in the jury-waived trial.
Workers Kelvin Mattocks and Robert Higgins
were working in the trench in Boston's South End
in October 2016 when it collapsed and broke a fire
hydrant supply line that flooded
the 14-foot deep trench with water.
Defense attorneys argued that the city of
Boston failed to properly maintain a fire hydrant.
Prosecutors, however, said Otto had a history
of safety violations and should have installed trench
boxes at the site.
District Attorney Rachael Rollins said in a

statement the defendants had a responsibility
to take measures that ensured the safety of
their employees.
"Instead, they flouted those regulations time and
again, without regard for the lives of the workers
they recklessly and callously put at risk," she said.
According to a report by the Occupational
Safety and Health Administration (OSHA), Otto was
overseeing the work when the trench collapsed
and took no precautions to protect his employees.
"The deaths of these two men could have and
should have been prevented," Galen Blanton, the
New England regional administrator for OSHA,
said. "Their employer, which previously had been
cited by OSHA for the same hazardous conditions,
knew what safeguards were needed to protect its
employees but chose to ignore that responsibility."
"Getting this conviction and the sort of signal
that it sends to other contractors, other people who
work in city of Boston and elsewhere, that if this is
how you conduct your business, this is what's going
to happen," prosecutor Lynn Feigenbaum said.

Toro Sells MTI Equipment
Business Acquired
in CMW Acquisition
Making good on plans to streamline its product
and services portfolio after acquiring Charles
Machine Works, The Toro Company has shed
CMW's pre-owned construction equipment
business by selling MTI Equipment back to
its founders.
Established in 1986 as a telecommunications
installation provider, North Point, Florida-based
MTI transitioned in the early 1990s into a
provider of pre-owned underground
construction equipment.
The Toro Company announced in February
that it would acquire Charles Machine Works,
the parent company of Ditch Witch and other
leading brands in the underground construction
equipment market, in a $700 million cash
transaction. The deal is expected to close by the
end of October, pending regulatory approvals and
other customary closing conditions, Toro said.

Equipment Rental Revenue Forecast to Outpace Economic Growth
The equipment and event rental industry in North America is expected
to finish the year with total revenue up 5.35 percent to $61.56 billion, the
first time combined rental revenue for Canada and the United States has
surpassed $60 billion, according to the latest forecast released by the
American Rental Association (ARA).
The updated figures, released Nov. 7, show rental revenue in the
U.S. forecasted to be $56.02 billion in 2019 with Canada generating
$5.54 billion in revenue from rentals of construction and industrial,
general tool and party and event equipment.
The five-year forecast calls for continued growth for U.S. rental revenue
through at least 2023, reaching $64.1 billion that year, and for Canada
to reach $6.35 billion.
Although the outlook calls for slightly slower growth rates than the
previous quarterly forecast in August, the industry continues to outpace
the general economy in the U.S. where gross domestic product (GDP)
growth slowed from a 3.1 percent annual growth rate in the first quarter
to 2.0 percent in the second quarter. The third quarter GDP growth
estimate is 1.9 percent.
According to IHS Markit, the forecasting firm that compiles data for ARA,
new tariffs on U.S.-China trade flows and diminishing fiscal stimulus could
contribute to a slowdown in annual real GDP growth from 2.3 percent in
2019 to 2.0 percent in 2020 and 2021, and 1.7 percent in 2022.
"Despite signs of a slowing economy, the equipment and event rental
industry continues to perform well. The most important thing
for rental companies to do is continue to execute their business plans
and aggressively manage their operations," says John McClelland, Ph.D.,
ARA vice president for government affairs and chief economist.

8

DECEMBER 2019 | UConOnline.com

"With chances of a recession in the next 12 months relatively low at
35 percent, rental businesses should be able to continue to grow revenues
and maintain strong balance sheets," McClelland says.

Uncertainty
Scott Hazelton, managing director, IHS Markit, says the next 12 to 18
months will feature significant uncertainty around trade and fiscal policy,
compounded by the U.S. elections.
"Rental firms are well positioned for uncertain times. The reluctance of
construction and industrial companies to invest in new equipment under
these circumstances, combined with a still expanding economy, suggests
that the opportunities for equipment rental will continue to grow, albeit at
a slower pace than the past few years," Hazelton says.
According to ARA, construction equipment rental in the U.S. is forecast
to grow 5.2 percent in 2019, with growth rates of 2.3 percent in 2020,
3.0 percent in 2021, 3.7 percent in 2022 and 3.1 percent in 2023 to reach
$43.9 billion.
The growth rates for general tool include 6.8 percent in 2019, 3.8 percent
in 2020, 3.96 percent in 2021, 5.2 percent in 2022 and 2.9 percent in 2023
to reach $15.7 billion.
Investment in equipment by rental companies in the U.S. is expected to
remain relatively flat each year with small declines in spending in 2020 and
2021, followed by slight increases in 2022 and 2023 to reach $14.55 billion.
In Canada, equipment and event rental revenue is expected to increase
2.4 percent in 2019 to reach $5.54 billion, with growth of 3.4 percent in
2020, 4.6 percent in 2021, 3.2 percent in 2022 and 2.7 percent in 2023
to reach $6.36 billion. *
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Underground Construction - December 2019

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