Rental industry expected to rise
Total equipment rental revenue in North America for 2013 is expected to reach $38.0 billion, according to the latest figures released by the American Rental Association (ARA) from its ARA Rental Market Monitor service updated in late October. This figure represents a 6.2% increase over 2012 with fourth-quarter revenue growth projected to be 7.1%.
The figure includes revenue for all three segments of the equipment rental industry -- construction/industrial, general tool/DIY and party/special event -- in both the United States and Canada combined.
In the United States alone, equipment rental revenue is projected to grow 6.5% in 2013 to reach $33.3 billion.
“The general economy in the U.S. has slowed down slightly this year with the gross domestic product (GDP) now forecast to grow 1.5% in 2013. That means equipment rental industry revenue continues to grow at more than four times the general economy,” said Christine Wehrman, ARA’s executive VP and CEO.
“The industry remains vibrant, strong and will benefit even more in the coming years due to nonresidential growth, supplemented with residential construction growth and the strong influence of the energy boom in North America. We expect revenue in the U.S. to grow 8.4% in 2014 and 11.3% in 2015,” Wehrman said.
According to the late October update, the ARA Rental Market Monitor North American Economic Analysis provided by IHS Global Insight projects revenue growth to accelerate in all segments through 2015 before leveling off in 2016 and 2017. The general tool segment will show the highest compound annual growth rate (CAGR) at 10.1% over the five-year forecast, while construction and industrial equipment revenue is forecast to see a CAGR of 7.8% between 2013 and 2017.
In the United States, the construction market and consumer spending are expected to be the most important drivers of growth of the equipment rental market in 2014. According to the U.S. economic analysis from the ARA Rental Market Monitor and IHS Global Insight, the U.S. equipment rental market is expected to continue its upward trajectory and show strong growth through 2017. Strong growth in residential and commercial construction through 2015 is expected to fuel the construction and industrial equipment segment, which is projected to grow 9.1% in 2014 and 10.5% in 2015.
The U.S. general tool segment is expected to grow 7.9% in 2014 and 15.5% in 2015. The ARA Rental Market Monitor also forecasts party and event rentals to benefit from continued improvement in consumer spending with rental revenue projected to show a 3.2% CAGR over the five-year forecast to 2017.
Overall in the United States, total equipment rental revenue is expected to grow at a CAGR of 8.6% between 2013 and 2017, exceeding pre-recession totals in 2015 and reaching $46.3 billion in 2017.