ARA Q4 Economic Forecast: Growth vs Tariff Uncertainty

The American Rental Association's updated forecast for the U.S. equipment rental industry indicated "continued softening in growth" in revenue. At current, it's projected a 3.3 percent revenue incase this year (2025) and a 2.3 percent growth for 2026.

This marks a $80.5 billion total in construction and general tool rental revenue in 2025 with 2026 increasing to $82.3 billion. For in-depth economic data, visit ARArental.org/ara-rentalytics.

This updated forecast shows a slight decline from the Q3 projection, where economists anticipated a 3.9 percent increase. They report that revenue from the construction and industrial segment should reach $63.4 billion with revenue from the general tool rental segment at $17.1 billion. Tariff policy uncertainty was one of the factors, along with the lowering (but likely flattening) of interest rates, and the persistence of high inflation. 

Scott Hazelton, managing director at S&P Global - the international forecasting firm that compiles data and analysis for the ARA forecast, called tariff policy a "moving target." Adding, “…and now with the Supreme Court issue [pending case against Trump tariffs], we have an even bigger moving target.”

More from the ARA's release:

Hazelton said the current U.S. GDP growth rate runs at a lower-than-desired 2 percent range and that heading into 2026, GDP growth will be “a function of trade, and there is some risk in the forecast depending on what happens with tariff policies.”

A lack of data stemming from the current U.S. government shutdown is hampering the usual forecasting process. “I’ve had no new construction data in two months,” Hazelton said, adding that other indicators are available but give reason for caution, such as an Architectural Billings Index that shows a downward trend — “not a great picture for leading indicators for construction spend.”

Similar factors are influencing equipment manufacturers’ outlooks.

“Mixed” is how Tom Doyle, ARA vice president, program development, described what he is hearing from OEMs (original equipment manufacturers) on their economic results this year and expectations heading into 2026. “A majority are saying single-digit down to flat, with the minority saying single-digit down, with what they’re seeing today and forecasting out. It’s probably going to be another year of uncertainty … it’s maybe not going to be a bad year, just a soft year. I think the same drivers that are in effect today are probably going to go forward,” he said.

With essentially flat growth forecast for the U.S. equipment rental industry for 2026 but recovery anticipated in 2027 and beyond, Hazelton said 2026 should be a year of “hold your own and prepare for better days to come.”