The American Rental Association (ARA) is forecasting a 13% decline in equipment rental revenue this year compared to 2019, dropping to $48.7 billion in the United States.
However, the latest forecast released by the association on Nov. 12 calls for modest overall growth in 2021, ticking up 0.3% to $48.9 billion, before accelerating recovery kicks in with growth of 9.2% in 2022, 6.8% in 2023, and 4.8% in 2024 to reach $59.7 billion. After so many rental stores saw business virtually disappear in the spring and early summer of 2020, the results set the stage for what will look like very favorable comparisons in 2021.
Construction and industrial rental revenue is forecast to finish 2020 with a significant hit in revenue, dropping 13.3% to $33.8 billion and a 3.3% decline is forecast for 2021 before double-digit growth of 11.2% comes in 2022.
The general tool segment weathered the COVID-19 pandemic the best and is expected to finish 2020 down 5.2% to $12.7 billion and is expected to top its 2019 revenue peak by 2022.
“The forecast shows us how hard the coronavirus pandemic hit the equipment rental industry. Hopefully 2021 will see us getting back some of the revenue losses we experienced in the equipment and general tool segments,” says John McClelland, ARA vice president for government affairs and chief economist.
Investment in equipment is significantly down in 2020, with a 43% decrease to $8.166 billion. Equipment spending is forecast to rebound by 17.4% in 2021 and by 46.3% in 2022 to surpass annual investment of $14 billion.
In Canada, total rental revenue for 2020 is expected to come in at nearly $4.7 billion, down 15.2% compared to last year, before growing 7.3% in 2021, 8.3% in 2022, and 6.8% in 2023 to $5.83 billion, exceeding the industry 2019 peak of $5.54 billion.
Construction and industrial rental revenue in Canada is expected to show a decrease of 15% in 2020 to $3.768 billion, but then grow 7% in 2021, 9.1% in 2022, and 7.4% in 2023.
General tool rental revenue in Canada is forecast to decline by 12.76% in 2020 with revenue expected to show an increase of 5.1% in 2021 and 4.9% in 2022.