The equipment and event rental industry in North America is set to surpass US$61.3 billion in revenue this year, according to the latest American Rental Association (ARA) forecast. This represents a 5% increase compared to 2018.
Although this figure is slightly down from the 5.3% previously forecast in February, it remains a strong figure and the steady growth is expected to continue in each of the successive years of the forecast, reaching $69.8 billion in revenue by 2022.
In the US, a 4.2% increase in revenue is expected in 2020, followed by rises of 4.3% in 2021 and 4.7% in 2022, reaching $63.5 billion.
Canadian rental revenue is forecast to grow by 2.5% in 2019 to a total of almost CAD$5.6 billion, and then it is expected to continue expanding with revenue increases of 4.4% in 2020, 5.6% in 2021 and 3.7% in 2022, achieving a total of more than CAD$6.3 billion.
Although the latest figures project slightly less growth than was forecast in February, the industry continues to outpace overall economic growth.
Scott Hazelton, Managing Director of IHS Markit, the forecasting firm that compiles data and analysis for the ARA’s Rentalytics subscription service, said, “The maturing economy, combined with trade issues, offers more limited opportunities to the construction and manufacturing sectors, while the stimulus from tax cuts to both consumers and business is fading.”
Despite this, not a single state in the US has reported a decline in construction, general tool or event rental revenue and there are no signs of recession; “However, weakness in core markets suggest that any forecast risk is on the downside and our forecast has evolved lower over the past six months,” Hazelton said.
A proposed infrastructure bill in the US gives reason to be positive, though the exact gain to rental would depend upon the size, time span and composition of the bill, according to Hazelton.
He said, “Something on the scale proposed by the President and Congressional leaders last week has the potential to boost equipment rental revenue by up to 10% from its baseline.”