The American Rental Association (ARA) now expects 7.3% growth in the US equipment rental industry this year, reaching a value of US$35.7 billion (€28.6 billion).
The latest forecast, from the ARA Rental Market Monitor, which is compiled by research company IHS, represented a slight reduction compared to its previous full-year 2014 forecast of 7.6% in the summer.
“The revision in our expectations has to do with the general economy and with the construction industry, where growth this year has not met expectations,” said Scott Hazelton, director of Industry Consulting at IHS.
“Construction will continue to improve in the fourth quarter, but it is not likely to accelerate enough to reach our earlier projections.”
Years to come
Next year, the ARA Rental Market Monitor forecast 9.2% growth in US equipment rental revenue, reaching US$39 billion (€31 billion). This represented a downgrade compared to the previous forecast of 10.5% growth.
And expectations for the following years have also been revised, with the ARA Rental Market Monitor now expecting 7.7% growth in 2016 (previous forecast 10.2%) and 8.5% growth in 2017 (previous forecast 8.9%).
By 2018, momentum is expected to pick up again, with 9.3% growth now expected (an upgrade from the previous forecast of 7.7%), reaching US$49.8 billion (€39.8 billion). However, this market total for 2018 is lower than the US$51.2 billion (€41 billion) that was previously forecast.
“We continue to monitor our industry on a quarterly basis to give our members the best information available in a rapidly changing economic environment,” said Christine Wehrman, executive vice president and CEO for the American Rental Association.
“The latest forecast continues to demonstrate a strong growth pattern for our industry,” Ms Wehrman added.
Over the next four years, the ARA said the construction and industrial segment and the general tool segment would experience near double-digit growth in US rental revenue. In 2015, construction and industrial rental revenue was projected to increase 9.8% and general tool 9%, followed by 7.9% and 8.1% in 2016, 8.6% and 9.8% in 2017 and 9% and 11.8% in 2018, respectively.
Meanwhile, the party and event segment was expected to continue its same steady growth, with revenue increasing 4.2% in the US this year to reach US$2.6 billion (€2.1 billion), followed by growth rates of 3.9%, 3.5%, 2.5% and 2.7% for 2015 through 2018.
The ARA added that rental companies in the US were expected to continue to invest more than 30% of their revenue in new equipment over the next five years. Total investment, according to the ARA Rental Market Monitor, is projected to reach US$11.9 billion (€9.5 billion) in 2014 and grow to nearly US$15.5 billion (€12.4 billion) in 2018.
The ARA also revised its forecast for Canadian rental industry growth. It said it now expected the country to see 5.4% growth in 2014 to US$4.9 billion (€3.9 billion), followed by growth of 5.2% in 2015, 6.8% in 2016, 3.5% in 2017 and 3.6% in 2018 to total US$5.9 billion (€4.7 billion).
These forecasts compared to its previous outlook of 5.2% growth in rental revenues in 2014, 6% in 2015, 6.6% in 2016, 3.5% in 2017 and 3.6% in 2018.