The American Rental Association’s (ARA) latest forecast for the US rental market has been moderated to 5.6% growth in 2016, followed by 4.9% growth in 2017.
The ARA’s previous forecast (complied by IHS) was for 6.6% market growth in 2016 followed by 5.6% growth in 2017.
Despite the softened forecast, the ARA said total rental revenues in the US – including revenues from the construction and industrial sectors; and general tool; and party and events sectors – were expecte to reach a record US$47.9 billion (€41.4 billion) this year, and climb to US$55.6 billion (€48 billion) in 2019.
Meanwhile, the ARA’s latest forecast for Canada is for a 2.2% decrease in total rental revenues this year to US$4.83 billion (€4.2 billion). It said the drop was down to a 2.9% decrease in construction and industrial equipment rental revenues.
The trend in Canada is expected to reverse in 2017, according to the ARA, with Canadian equipment rental revenue forecast to show a 4.7% increase and grow in successive years to reach US$5.64 billion (€4.87 billion) in 2019.
In the US, the ARA said several factors posed potential risk to the industry’s growth, including unexpected government policy changes, oil price changes and more.
John McClelland, ARA vice president for government affairs and chief economist, said, “The adjustments in our forecast reflect changes in the outlook for the entire economy. The fact that the equipment rental industry continues to have revenue growth more than double that of the US economy as a whole underscores the positive aspects of this latest forecast by IHS.”
And Scott Hazelton, managing partner, IHS Global Insight, Lexington, Mass, added, “The US economy continues to expand. The wild card is that much of the global economy has failed to ignite.
“Sluggish growth from US trading partners continues to weigh on oil prices, preserve the high value of the dollar and subdue business confidence in key industries.
“The lingering weakness in manufacturing and energy markets will limit rental revenue growth somewhat more than expected, but construction and home renovation remain strong.
"We have lowered the national growth rate by about 150 basis points, but the outlook remains fundamentally strong at about twice the growth rate of gross domestic product (GDP) in the US.”