Total equipment rental revenue in North America is expected to reach $38 billion this year, 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 percent increase over 2012 with fourth quarter revenue growth projected to be 7.1 percent.
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 U.S. and Canada combined.
In the U.S. alone, equipment rental revenue is projected to grow 6.5 percent 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 percent in 2013. That means equipment rental industry revenue continues to grow at more than four times the general economy,” says Christine Wehrman, ARA’s executive vice president 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 percent in 2014 and 11.3 percent in 2015,” Wehrman says.
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 percent over the five-year forecast while construction and industrial equipment revenue is forecast to see a CAGR of 7.8 percent between 2013 and 2017.
In the U.S., 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 percent in 2014 and 10.5 percent in 2015.
The U.S. general tool segment is expected to grow 7.9 percent in 2014 and 15.5 percent 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 percent CAGR over the five-year forecast to 2017.
Overall in the U.S., total equipment rental revenue is expected to grow at a CAGR of 8.6 percent between 2013 and 2017, exceeding pre-recession totals in 2015 and reaching $46.3 billion in 2017.
ARA members who are subscribers to the service also participated in a webcast last week with Scott Hazelton, a senior partner with IHS Global Insight, outlining the key economic factors impacting the equipment rental industry.
Hazelton said the U.S. economic expansion, after a slowdown in the third quarter this year, will pick up in 2014 with homebuilding to surge through early 2016. He also said the North American energy boom will continue to create jobs, investment and a competitive advantage in manufacturing, which will benefit equipment rental companies.
Investment in equipment by equipment rental companies also is expected to grow in 2014, but jump in 2015 to surpass $14 billion.
From: American Rental Association
**Share the Magazine with your executive colleagues and friends!
Follow the Magazine:
(After you have filled in your email address in the column at the right hand side of the screen, a confirmation email will sent to your email address. You will have to confirm it before subscription begins)
Follow us on Twitter:
Like us on Facebook:
**As part of the Magazine’s drive to reward subscribers/followers, we will be providing subscribers/followers special access to exclusive content which will not be otherwise available to normal visitors. Please be sure to subscribe to the Magazine. Many visitors have given us positive comments that they will be bookmarking the site, but as the system is unable to capture a working email address to which the passcodes for exclusive content will be sent, they will miss out on this content. Do note that passcodes are locked to each exclusive content, not a one-for-all access, so do provide a working email address that you check regularly so as not to miss out on them!