June 2017 Vol. 72 No. 6
Newsline
Rental Industry 5-Year Forecast Sees $59.4 Billion In Revenue
The new five-year forecast for equipment rental industry revenues released by the American Rental Association (ARA) continues to call for steady gains, and expectations for growth are greater than in the February forecast.
ARA now projects U.S. equipment rental revenue to reach $49.4 billion in 2017, up 4.5 percent over last year. The forecast calls for U.S. rental revenue to grow – 4.7 percent in 2018, 5.1 percent in 2019, 4.6 percent in 2020 and 4.4 percent in 2021 – to reach $59.4 billion combined for the three segments of the industry, including construction/industrial, general tool/light construction and party/special event.
This is the second consecutive quarterly forecast to project stronger growth compared to the previous quarterly update of the ARA Rental Market Monitor subscription service by IHS Markit, the economic forecasting firm that compiles the data and analysis as part of a partnership with ARA and Rental Management.
“Equipment rental continues to post strong performance numbers with annual revenues closing in the $50 billion mark this year,” said John McClelland, ARA’s vice president for government affairs and chief economist.
“The issues going forward are how the Congress is going to deal with tax reform and infrastructure spending. If tax reform can lower rates and simplify the code for all businesses, that could be a sign of even stronger growth; and a strong infrastructure bill will add to that momentum,” McClelland said.
Scott Hazelton, managing director, IHS Markit, says weak first-quarter numbers for the U.S. gross domestic product (GDP) masked solid demand for investment, which will help fuel growth in equipment rental revenues.
Despite sluggishness in nonresidential construction, contractions in real residential construction and uncertainty of additional infrastructure spending, the construction and industrial equipment segment, and general tool rental segment are projected to achieve compound annual growth rates (CAGRs) of 4.1 percent and 6.1 percent, respectively, between 2017 and 2012, according to the ARA Rental Market Monitor.
In Canada, the five-year forecast calls for accelerating revenue growth each year, starting with a 2.7 percent increase in 2017 to reach $5.12 billion. Total rental revenue is expected to grow another 3.1 percent in 2018, 4.2 percent in 2019, 5.3 percent in 2020 and 5.9 percent in 2021 to reach $6.13 billion.
FOR MORE INFORMATION:
American Rental Association, (800) 334-2177, ararental.org
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