A Quad Cities-based equipment rental association predicts the industry will grow in the coming months, but that growth is slowing down.
In its updated forecast, the American Rental Association (ARA) indicates that the U.S. equipment rental industry’s 2024 growth projection indicates softening. The most current projections indicate a 8.9% revenue increase in 2024 totaling $78.7 billion in construction and general tool rental revenue, and a 5.3% growth in 2025.
The ARA, which is 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. ARA members, which include more than 11,500 rental businesses and more than 1,000 manufacturers and suppliers, are located in every U.S. state and more than 44 countries worldwide.
The updated forecast is a decrease from last quarter’s projection, which predicted a 9.7% increase totaling $79.2 billion. Broken down by segment, construction and industrial rental revenue (CIE) is projected to be $62.3 billion and general tool rental revenue is expected to total $16.4 billion.
“While the rental industry and opportunities continue to expand, we are experiencing softer growth,” said Tom Doyle, ARA vice president, program development. “The ARA quarterly survey results confirm this softening.”
“The forecast for construction and industrial has not changed much since last quarter, perhaps a few tenths of basis points, but there has been more change to general tool,” Scott Hazelton, managing director at S&P Global, said in a news release from ARA. “The market is still doing well but slowing. Next year’s GDP growth is lower than trend at 1.6% growth, the trend is around 2.1%. The overall view of rental is positive moving forward, but there is uncertainty out there.”
Kurt Barney, president, Vandalia Rental, Vandalia, Ohio, adds, “Largely what we’re seeing is softening growth as well. We’re seeing pricing elasticity. It’s no longer, ‘Do you have it?’ We’re back to doing business like 2019 when we have to really communicate the value proposition of working with us.”
The updated forecast for total Canadian equipment rental revenue shows a 6.6% growth totaling $5.75 billion, compared to last quarter’s projection of 7.2% growth, totaling $5.79 billion. Broken down by segment, general tool and CIE are both expected to see growth.
Canadian general tool revenue growth this year is projected to be 6.8% at $1.08 billion, and Canadian CIE revenue in 2024 is projected to be $4.67 billion.
