The equipment rental industry in the United States is expected to show significant growth of 7.3 percent in 2014 to reach $35.7 billion, according to the American Rental Association’s (ARA) latest forecast from the ARA Rental Market Monitor.
The revised figures, compiled by IHS, formerly IHS Global Insight and recently released by ARA, are slightly below ARA’s previous July forecast of 7.6 percent revenue growth in 2014 to reach $35.8 billion.
“The revision in our expectations has to do with the general economy and with the construction industry, where growth this year has not met expectations,” said Scott Hazelton, director of Industry Consulting at IHS. “Construction will continue to improve in the fourth quarter, but it is not likely to accelerate enough to reach our earlier projections.”
The equipment rental industry’s growth rate, however, will more than triple the expected growth in gross domestic product (GDP) in the U.S. in 2014 and exceed the growth of the industries it serves.
In 2015, the equipment rental revenue is expected to grow another 9.2 percent to reach $39 billion, followed by growth of 7.7 percent in 2016, 8.5 percent in 2017 and 9.3 percent in 2018, reaching $49.8 billion.
“We continue to monitor our industry on a quarterly basis to give our members the best information available in a rapidly changing economic environment,” says Christine Wehrman, executive vice president and CEO for the American Rental Association. “The latest forecast continues to demonstrate a strong growth pattern for our industry," says Wehrman.
Over the next four years, the construction and industrial segment and the general tool segment will experience near double-digit growth in U.S. rental revenue. In 2015, construction and industrial rental revenue is projected to increase 9.8 percent and general tool 9.0 percent, followed by 7.9 percent and 8.1 percent in 2016, 8.6 percent and 9.8 percent in 2017 and 9.0 percent and 11.8 percent in 2018, respectively.
The party and event segment is expected to continue its same steady growth, with revenue increasing 4.2 percent in the U.S. in 2014 to reach $2.6 billion, followed by growth rates of 3.9 percent, 3.5 percent, 2.5 percent and 2.7 percent for 2015 through 2018.
The forecast for Canada calls for 5.4 percent growth in 2014 to $4.9 billion, with growth of 5.2 percent in 2015, 6.8 percent in 2016, 3.5 percent in 2017 and 3.6 percent in 2018 to total $5.9 billion at the end of the latest five-year forecast.
It also is expected that rental companies in the U.S. will continue to invest more than 30 percent of their revenue in new equipment over the next five years. Total investment, according to the ARA Rental Market Monitor, is projected to reach $11.9 billion in 2014 and grow to nearly $15.5 billion in 2018.