Economic indicators are mixed and uncertain, but all continue to point toward significant growth for equipment rental revenue in the United States, according to the latest update of American Rental Association’s (ARA) five-year forecast.
The ARA, based in Moline, is an international trade association for owners of equipment and event rental businesses and the manufacturers and suppliers of construction/industrial, general tool and party/event rental equipment.
The quarterly update, released earlier this month, projects equipment rental revenue – including the construction and general tool segments – to grow 11.2% to nearly reach $55.9 billion in 2022. ARA expects growth of 6.2% in 2023, 2.5% in 2024, 3.3% in 2025 and 3.7% in 2026 to total more than $65.1 billion.
“Rental revenue continues to experience significant growth, despite some headwinds in 2022. The longer-term forecast, while showing slower growth than this year, remains bullish. It is generally a good time to be in the equipment rental industry,” Tom Doyle, ARA vice president for program development, said in a news release.
“In these times of higher uncertainty, it is prudent to closely watch the driving factors to the forecast for changes that will affect build schedules for original equipment manufacturers (OEMs) or demand for rental companies,” he added. “Depending on how long we have high inflation, supply chain constraints, labor shortages and climbing interest rates, those econometric drivers can have an impact on the rest of 2022 and the outlook for 2023.”
For construction equipment rental revenue, the forecast calls for a 12.5% increase in 2022 to surpass $41.6 billion, with growth slowing to 7% in 2023, 2% in 2024, 3% in 2025 and 3% in 2026.
General tool growth is expected to be 7.4% in 2022 and then remain fairly steady with 5% growth in 2023, 3% in 2024, 5% in 2025 and 5% in 2026.
The ARA forecast for equipment rental revenue in Canada, combining construction and general tool revenue, closely mirrors the U.S. outlook. It is projecting growth of 14.4% in 2022 to $4.7 billion, 6% in 2023, 2% in 2024, 3.4% in 2025 and 3.3% in 2026 to exceed $5.4 billion.