For the first time since the COVID-19 pandemic impacted the equipment rental industry, the latest American Rental Association (ARA) forecast calls for more positive growth in 2021 and beyond. This comes as a breath of relief for the industry, which was bombarded by dramatic declines and event cancellations due to the COVID-19 Pandemic.
In 2020, the entire rental industry witnessed a 11.7 percent decline in revenue. The new ARA forecast, released on Feb. 16, depicted an increase of more than 1.5 percent growth in 2021 with the industry surpassing $50.2 billion.
The new forecast is higher than the prior forecast, released in Nov. 2020, of only 0.3 percent due to the 2020 economic data.
“With the government stimulus programs and the rollout of the vaccine, people are beginning to have more confidence. The equipment and event rental industry often recovers from adversity more quickly than the industries it serves, and it looks like this is happening again,” said John McClelland, Ph.D., ARA vice president for government affairs and chief economist.
The new forecast is higher due to economic data at the end of 2020 being better than expected, says Scott Hazelton, managing director of IHS Markit.
“From an equipment rental perspective, construction did not slow as much as expected, although we do expect it to remain a drag in 2021. The larger surprise was the performance on manufacturing, which is also a source for equipment rental demand,” Hazelton says.
The ARA anticipates the growth to continue with revenue reaching $55.9 billion in 2022 and $60.5 billion in 2024.
- The construction segment is anticipated to see a 1 percent decrease, compared to 11 percent in 2020
- The general tool segment is expected to grow 4 percent.
- While the forecast reflects the latest COVID-19 economic relief bill passed in December, it does not include the $1.9 trillion American Rescue Plan being proposed by the Biden administration.
- The ARA forecast shows an increase of 7.3 percent in Canada’s equipment rental revenue in 2021 attaining $5.2 billion and reaching $6.2 billion in 2024.
Insight provided by the American Rental Association and edited by Chantal Zimmermann.