ARA confirms upbeat US rental forecasts
By Murray Pollok14 March 2011
The American Rental Association (ARA) is predicting a strong rebound in the US equipment rental industry up to 2015, forecasting a 7% increase in equipment rental revenues this year followed by higher growths of between 9% and 14% up to 2015.
If ARA is correct, total US equipment rental revenues (including party and events) will increase to around US$28.5 billion this year, followed by approximate increases of 14% in 2012, 9% in 2013 and 13% in both 2014 and 2015. US rental revenues would reach almost $45 billion in 2015, up from around $27.0 billion last year.
Up to 2013 these forecasts show almost no change from those published by the association at a meeting in France in December 2009. However, ARA and its consultant, IHS Global Insight, have almost doubled the growth prediction for 2014, and is forecasting that the 13% increase now forecast for that year will be sustained through to 2015.
The vast majority of the total revenue figures - and growth - is generated by construction, industrial and general tool rentals, forecasts the ARA. Party and events rentals in the US is currently valued at around $2.5 billion and is forecast to grow only marginally over the next four years.
The ARA has not published details of how this growth will be achieved given the continued uncertainty in the US econony. Those discussions are contained in its statistics reports, which are not made freely available.
However, it is presumably banking on a number of drivers, including increased rental penetration as contractors find it difficult to raise asset finance; greater inroads into industrial rental markets; larger fleet sizes as rental companies return to higher levels of capital expenditure; and continued progress on rental prices, which are now showing the first signs of improvement.
The ARA has also confirmed the greatly increased attendance at the Rental Show two weeks ago, with rental company visitor numbers up almost 40% on the previous year and the number of rental businesses represented increasing by just under 30%.
"It was a great show for the industry," said Christine Wehrman, ARA's chief executive officer. "Attendees demonstrated they were here to buy equipment, strengthen their businesses and celebrate their industry."
ARA quoted Dave Garton, marketing manager of John Deere Construction & Forestry, as saying; "The best part of the show in 2011 was the mood of the customers. After a couple years of heads down, walk-right-past-our-booth traffic, it was great to see some long-time friends stop by to talk about machine purchases.
"It was even better to meet some new contacts and learn about their business. The best word to sum the show up actually comes from one of our customers who said people seem to have more ‘confidence' than they have in the past."