ARA forecasts 13% fall in 2020 and flat 2021
16 November 2020
The American Rental Association (ARA) is forecasting a 13% decline in equipment and event rental revenue this year compared to 2019, dropping to US$48.7 billion in the US.
The ARA forecast, released on 12 November, forecasts a flat 2021 - growing just 0.3% to $48.9 billion - before accelerating to 9.2% in 2022, 6.8% in 2023 and 4.8% in 2024 to reach $59.7 billion.
The party and event segment is forecast to show the largest drop in 2020 revenue, down almost 40% to $2.2 billion. After so many rental stores saw business virtually disappear in the spring and early summer of 2020, the ARA forecasts a robust rebountd of 36.4% in 2021 to reach $3 billion.
This recovery falls short of making up for the 2020 decline and the segment is not expected to reach 2019 revenue levels again until 2024.
Construction and industrial rental revenue also is forecast to finish 2020 with a significant hit in revenue, dropping 13.3% to $33.8 billion and a 3.3% decline is forecast for 2021 before double-digit growth of 11.2% comes in 2022.
The general tool segment weathered the pandemic the best and is expected to finish 2020 down 5.2% to $12.7 billion and is expected to top its 2019 revenue peak by 2022.
Investment in equipment is significantly down in 2020, with a 43% decrease to $8.166 billion. Equipment spending is forecast to rebound by 17.4% in 2021 and by 46.3% in 2022 to surpass annual investment of $14 billion.
“The forecast shows us how hard the coronavirus pandemic hit the equipment and event rental industry. Hopefully 2021 will see us getting back some of the revenue losses we experienced in the equipment and general tool segments”, said John McClelland, ARA vice president for government affairs and chief economist.
“However, the event segment continues to have a steep hill to climb and we will be working hard to bring more relief to that segment through government stimulus programs,”
In Canada, total rental revenue for 2020 is expected to come in at nearly $4.7 billion, down 15.2% compared to last year, before growing 7.3% in 2021, 8.3% in 2022 and 6.8% in 2023 to $5.83 billion, exceeding the industry 2019 peak of $5.54 billion.
Construction and industrial rental revenue in Canada is expected to show a decrease of 15% in 2020 to $3.768 billion, but then grow 7% in 2021 and 9.1% in 2022 and 7.4% in 2023.