Equipment Rental Revenue Expected to Outpace Economic Growth

The North American equipment and event rental industry is expected to have a total revenue of $61.56 in 2019, up 5.35%.


The North American equipment and event rental industry is expected to have a total revenue of $61.56 in 2019, up 5.35%. This is the first time combined rental revenue for Canada and the United States has surpassed $60 billion. 

The latest updated figures show rental revenue in the U.S. forecast 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 quarter, the industry continues to outpace the general economy in the U.S. where gross domestic product growth slowed from a 3.1% annual growth rate in the first quarter to 2% in the second quarter. The third quarter GDP growth estimate is 1.9%. 

Tariffs Impacts the Industry 

Meanwhile, 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% in 2019 to 2% in 2020 and 2021, and in 1.7% 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. “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.”

In addition, 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,” Scott Hazelton, managing director, IHS Markit 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.

In party and event, expected growth rates are 6.5 percent for 2019, 5.7 percent in 2020, 5.6 percent in 2021, 5.1 percent in 2022 and 5.5 percent in 2023.

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.