2025 in Review: An Overview of the Equipment Rental Industry

As reported in the latest from the American Rental Association (ARA), the equipment rental industry is expected to grow, just not as much as originally anticipated. That growth, though, is still in the billions of dollars. To understand the year and how this projection came about, we need to step back and see the bigger picture of the industry and how we got here.

Consider the rental industry as two parts. One part serves events, the other the general tools and equipment contractors and homeowners rely on to complete the projects at hand. Where roughly 25 percent of the revenue for the rental industry comes from the party/event side, the overwhelming majority of the revenue is from equipment rental.

Aside from the revenue, another difference between events to equipment has been how that side of the industry has maintained a more “local” presence. There may be a few regional companies and national services serving events, but it’s very different on the equipment rental side. Only a couple of decades ago, the segment was primarily local rental companies — today, national and regional chains provide coverage those local shops couldn’t compete with.

“That’s really changed the mix,” says Tom Doyle, vice president, program development at the ARA. Speaking on their growing presence in the industry, “back then, it might have been 15 percent of the marketplace; in 2010, 25 percent. If you look at the top 10 companies, the national coverage is over 40 percent and climbing closer to 50 if you look at it by number of locations or rental revenue.”

By these numbers, there’s a correlation between the growth in the industry to the rise of the larger national rental companies. These organizations can more easily take care of the large, regional, or national construction customers, where smaller businesses just aren’t as easily able in regard to fleet size or providing the solutions typically required by the large contractors.

According to published numbers online, the big three names account for over 4,100 rental locations across North America (Herc Rentals has 600+, United Rentals has 1,520, and Sunbelt Rentals has 2,034, at the time of this writing).

For equipment rental businesses with one to three local locations, how can one remain competitive? The short, easy-to-say, difficult-to-do answer: use that to your advantage.

“There’s major players and then there’s a lot of other independents that survive and thrive,” says Doyle. In general terms, he explains that large companies tend to run on policies. Successful policies, but more rigid than the local business. Those local entities can make more on-the-spot decisions to help customer satisfaction.

Editor’s Note: Rental acknowledges the fact that locations of retail stores such as Home Depot, Lowes, Menards, etc. may also provide a rental service — albeit a small percentage of their business compared to their retail. 

One of the reasons the rental industry has grown how it has was through customer service, says Doyle. “If you treat the customer well, they’re going to come back no matter what size you are. That’s been our message to all our members and it’s resonated well. I think customer satisfaction remains high, how well you can serve your customer, providing the benefits that they can’t get elsewhere or as good as elsewhere, depending on what solutions you can bring.”

The Year, Projection

The ARA’s updated projection (Q4) for the equipment rental industry was published in November 2025, which included an outlook that the industry should see a 3.3 percent revenue growth by the totality of the year — a softening of the original projection from their Q3 report.

Even further, it anticipated an even further softening for 2026 with a 2.3 percent growth, meaning that the industry is anticipated to grow from $80.5 billion in revenue (anticipated for 2025) to $82.3 billion. The association collects this data by surveying its members and through a long-term partnership with the economic firm S&P Global.

Even though it’s not the up-trending line we all hoped for, Doyle says that they saw the change coming.

“I think the construction spending on both the residential and non-residential side is really what caused that down. It was a big reason that there was softened growth,” he says.

One of the reasons for the softening was the uncertainty through the implementation of tariffs earlier in the year. That uncertainty rippled through the system, causing a slowdown in spending on both construction work as well as equipment manufacturing to import the supplies and materials needed.

“Companies don’t like uncertainty,” says Doyle. “[However,] I think U.S. companies have become very adept at handling changes, but when you get thrown onto this treadmill of uncertainty.”

It’s a treadmill the country has walked on before with concerns about recessions, the turmoil that always comes with a political change, and the unknown outcomes of new policies. In retrospect, things have calmed down. The Big Beautiful Big brought out incentives for businesses. Good companies will always find new levers to pull.

“That’s the only reason, I think, that these rental companies have thrived, is they’ve learned the levers they can pull depending on the economic conditions,” says Doyle.

That’s part of the beauty of the equipment rental industry. It’s the solution when the economy makes owning an asset financially difficult. The fewer assets the customer has, the more they can focus on the core of their work. The ARA has tracked own vs rent on an annual basis and, at current, rent vs own is at an all-time high at 60 percent (average, dependent on product category).

“We saw more rental opportunities come out from the small, medium, and large contractors — businesses that are out there deciding to rent versus own. But it’s a softened growth, and in some areas it dropped a bit if there’s not one of those mega projects,” says Doyle. He continues stating that the ARA has also seen some areas that have flattened, if not dropped to single digits of growth.

He adds, “What I’ve seen in the cycles over the years is when there’s been uncertainty, rental benefits from that…it gets growth out of that because you don’t know what next month, year, or the next couple of years is going to create. [Customers] will probably want to rent instead of own.”

Long-standing Challenges

Equipment rental has been challenged with some of the issues forever: meeting the needs, expectations, and demands of the customer; economic conditions; technology driving change; and diversifying the fleet.

Customer Needs — As manufacturers attempt to remain on top of emerging trends and methods, the product development cycle has gotten shorter, which comes at a double-edged sword for rental companies. First, to know and provide what customers expect and want. Second, providing a benefit to rent equipment rather than purchase an asset that may be obsolete in about 3 years' time, where the cycle was more than double that years ago.

Marketplace Changes — Even if a rental shop has good customer satisfaction, major events such as a pandemic, an interest rate spike, rampant inflation, or a new policy introduction can cause a lot of havoc.

Technology — If you look at only the last two years, the rate of change driven by technology has been significant. Everything from setting up a business, market strategy, getting financially set up, and even how to support customers all can change with technology. While a new technological solution may be able to lower cost or improve customer service, how effective is a new purchase if the investment from two years ago still works great?

“Understanding that this rate of change is coming pretty quick and it’s expensive to get into some of the new innovation and technology areas — smaller companies really can’t afford to risk that [investment],” says Doyle.

Yet, it will be incumbent upon each rental company to continue to treat customers as they want to be treated. If that means setting up a reservation for equipment online, over the phone, in person, or even through an app. These customer-end experiences and solutions have gotten better and continue to grow.

Review Purchasing Strategies – As equipment rentals look at new options to their fleet, consider upgrading assets as necessary. While this may increase maintenance and repair costs for the existing assets, any downturn will not likely be across the board and use the specialty categories as an advantage.

Growth, Despite Uncertainty

While it's not anticipated that 2026's equipment rental market will "take off," experts are still forecasting a softened growth similar to 2025. For one, the Big Beautiful Bill is believed to create a strong tax structure for businesses to help them go forward. It's also created some expensing advantages for owned equipment and projects. Of course, there's also the factor of interest rates. 

Doyle is calling 2026 spotty. "I think it's what's going to be similar to 2025 and it'll be softened growth. It'll be spotty growth. It won't be universal," he says. "Some of the areas that have got these big projects are going to see a better marketplace."

Yet, it'll be customer service to help businesses rise. "Some of the things you can't control," says Doyle. "We don't control what the Fed's going to do. You've got to learn how to manage it. Take care of your business. Understand the life cycle of your project when you bring new products in and how you take care of them from the time of birth to the time you sell them off. 

Be an expert in fleet management and spend more time on customer awareness. That's really where it meets it. If you take care of your customer, they're going to want to come back to you. Whether you're a small, medium, or large company. 

Continue to focus on providing just excellent customer solutions."