ARA trims 2014 US rental forecast
By Helen Wright12 August 2014
The American Rental Association (ARA) has slightly lowered its growth forecast for US equipment rental revenues in 2014 to 7.6%, compared to its previous forecast of 7.7%.
Data from the ARA’s latest Rental Market Monitor showed that the equipment rental industry in the US was expected to generate US$35.8 billion (€26.8 billion) in revenues this year. This compared to the first quarter forecast for 2014 of U$35.9 billion (€26.9 billion).
Next year, the ARA said US equipment rental revenues were forecast to grow 10.5% to reach US$39.6 billion (€29.7 billion), while further growth of 10.2% is forecast for 2016, bringing the total to US$43.6 billion (€32.7 billion), surpassing the previous high of US$36.9 billion (€27.8 billion) in 2007.
Further ahead, the ARA said the growth rate was expected to be 8.9% in 2017 and 7.7% in 2018, when total rental revenues were forecast to hit US$51.2 billion (€38.4 billion).
The ARA Rental Market Monitor is compiled by research company IHS Global Insight.
Scott Hazelton, IHS Global Insight managing director, said the US economy slowed more than expected in the first half of the year, but equipment rental demand had remained strong and rental growth would still outperform the overall economy.
“Looking forward, commercial construction and housing starts will contribute to growth in the construction and industrial and general tool segments,” he added.
Adjusted segmental forecasts
Over the next two years, the ARA said the construction and industrial segment and the general tool segment in the US would experience double-digit growth in rental revenue, albeit at a slower rate than its previous forecast suggested.
For 2015, it said construction and industrial rental revenues were now projected to increase 10.7% and general tool revenues were expected to grow 11.7%.
This compared to its previous 2015 growth forecast for construction and industrial rental revenues in the US of 11%, and general tool forecast of 13.2%.
However, for 2016, the new segmental forecast was for increases of 10.4% in construction and industrial rental revenues and 11.6% in general tool revenues. This was higher than the ARA’s previous forecast of 10% and 11.4% respectively.
The ARA said the party and event segment was expected to continue steady growth, with revenues increasing 4.2% in the US in 2014 to reach US$2.6 billion (€1.9 billion). Its previous forecast for this segment was for 4.4% growth.
It added that rental companies in the US were expected to continue to invest more than 30% of revenues in new equipment over the next five years.
Total investment, according to the ARA Rental Market Monitor, was projected to reach US$12.1 billion (€9.1 billion) in 2014 and grow to US$16.1 billion (€12.1 billion) by 2018.
Forecast for Canada
Meanwhile, the ARA said its new forecast for Canada was for 5.2% growth in rental revenues in 2014 to US$4.9 billion (€3.7 billion), with growth of 6% in 2015, 6.6% in 2016, 3.5% in 2017 and 3.6% in 2018 to total US$5.9 billion (€4.4 billion).
Its previous forecast for Canadian rental revenues was for 5.8% growth in 2014 followed by 6% growth in 2015, 3.5% in 2016, 3.5% in 2017 and 3.6% in 2018.