The American Rental Association (ARA) has issued tempered forecasts for rental markets in US and Canada in coming years, but the outlooks still suggest that stable growth in the region is here to stay.
The ARA’s latest forecast is for 6.7% US rental industry revenue growth in 2016 – a strong growth outlook, albeit slightly moderated compared to the association’s previous forecast of 7.8% US rental market growth next year.
Its latest Rental Market Monitor forecast, published by RentalPulse, also forecast US rental market growth of 6.7% in 2017, followed by growth of 6.2% in 2018 and 5.8% in 2019 to reach a value of US$48.7 billion (€45 billion).
This compared with its previous forecast (issued in August) for US rental market growth of 7.3% in 2017, 7.4% in 2018 and 6.5% in 2019 to reach US$50.6 billion (€47 billion).
In Canada, the ARA said it now expected 2016 rental market growth of 0.8%, followed by 5.7% in 2017, 6.3% in 2018 and 5.6% in 2019 to reach US$5.9 billion (€5.5 billion).
The ARA’s previous forecast for Canada was for 2016 growth of 3.1%, 2017 growth of 3.9%, 2018 growth of 6.4% and 2019 growth of 4.5% to reach US$4.83 billion (€4.5 billion).
ARA CEO and executive vice president Christine Wehrman said, “The performance of the equipment rental industry since the recession has been very positive and as auxiliary industries recover and grow, we anticipate equipment rental revenue growth to meet the forecast of the next five years.
“This means equipment rental companies can prepare for steady growth, plan for expanding their markets and build inventory to meet their customer demand.
"The forecast also shows that many customers who have turned to renting equipment during and after the recession have seen the benefits and will continue to rent to control their costs. The secular shift to rental is here to stay.”
IHS Economics, the forecasting company that provides data and analyses for the ARA Rental Market Monitor, added, “A 2015-19 compound annual growth rate (CAGR) of 2.7% is projected for real total construction with real non-residential growing 1% and real residential growing 5.7%.
“This will drive revenue growth in the construction and industrial segment and the general tool segment, which will average annual revenue increases of 6.5% and 6.7% respectively, over the period.”