The American Rental Association (ARA) forecasts a 16.6 percent decline in industry revenue for 2020, amounting to a reduction of US$9.3 billion. The economic models, according to research conducted by IHS Markit, show slight quarter-over-quarter improvement for the third and fourth quarters of 2020, however.
Canadian rental revenue is projected to drop 11.3 percent in 2020.
Looking ahead, projections showed total construction in the US declining by -15.7 percent in 2020 followed by -2.2 percent in 2021 but finally rebounding in 2022 by 8.7 percent. The numbers could change, however, based on when the US economy and rental industries get back on track.
According to the research - released during a free ARA Rentalytics webinar on April 9 hosted by ARA - construction has slowed in some areas with the impact being felt by equipment rental companies, but IHS Markit sees the current downturn not matching the Great Recession in 2008-2009. While the financial impacts appear similar to those years, the firm said they do not see the current market situation lasting as long.
The free ARA webinar, which was the third in a series of four, covered ARA’s response to coronavirus; industry surveys to understand the impact on ARA members; legislative updates from Washington, D.C.; and a look at the overall economy.
With US stimulus checks being deposited into many Americans’ bank accounts, and talks from President Trump of a potential US$1 trillion boost to infrastructure, the survey showed “businesses are reaching a state of equilibrium with many members indicating that while the situation may not be getting better, it is no longer getting worse. This may be attributed to some optimism regarding recover/stimulus funding or simply that the coronavirus outbreak has reached maximum impact on the industry,” according to the ARA.