ARA forecasts 6.9% growth in North America as "mood lightens"

07 February 2012

The Rental Show had a busier start than for many years.

The Rental Show had a busier start than for many years.

The US rental industry will far outstrip general economic growth in 2012 helped by a structural shift towards rental, said the American Rental Association (ARA) on the opening day of the Rental Show in New Orleans, Louisiana.

Chris Wehrman, ARA's chief executive officer said the industry "will outperform GDP three times - 7% overall growth is predicted. We are most bullish in the construction /industrial sector."

The ARA predicts that construction/industrial rentals will grow by 7.5% this year, with general tool rentals up 6.7%. In contrast, the party and events sector is expected to report more modest growth of 2.5%, reflecting the fact that it fell far less dramatically during the downturn.

John McClelland, ARA's vice president of government affairs, said the rental industry was digging out of a deep hole; "but we are starting to climb and with a bit of vigour. And the fact that we are outperforming GDP growth is a good sign."

He said there was a "secular shift" occurring with contractors relying on rental companies more to expand their fleets, because they de-fleeted during the recession and because there is still some uncertainty about a US economic recovery that remains "tepid", making contractors cautious about investing in new equipment.

"We are expecting this growth to continue - and it will be interesting to see if rental penetration continues to increase or flattens out," said Mr McClelland.

The ARA forecasts that capital investment on equipment will increase by 11.9% in North America this year, with construction/industrial sectors performing best, seeing 15% growth.

"The general feeling is just overwhelmingly positive with respect to how they [rental companies] are going to do this year", added Mr McClelland, "The mood is just much lighter."

That mood was evident in the first morning of the show, which was busier than previous years. Clay Eubanks, president of Takeuchi Manufacturing (US), told IRN that it had been the busiest start to the exhibition for five years. He echoed ARA's optimism about the shift towards rental in North America; "I believe it 100%. It's a fact that companies don't have finance; the wherewithal to acquire equipment...We're very optimistic that rental penetration will dramatically increase over the next three years."

The opening day of the show also saw ARA change its leadership, with outgoing president Ted Cook of Ventura Rental Center in California handing over to Mike Flesher of New York-based Taylor Rental Center.

Mr Flesher said the North American industry had the "best opportunity we've ever had to tell our story to everyone. That will be a key priority for me in the next 12 months."

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