Equipment rental revenue will grow at reduced rates, according to the latest five-year forecast from the American Rental Association (ARA).
“The outlook for the equipment rental industry calls for expected growth, although at reduced rates,” Scott Hazelton, managing director of IHS Markit, said in a press release. IHS Markit is forecasting firm that completes data and analysis for ARA. “The maturing economy, combined with trade issues, offers more limited opportunities to the construction and manufacturing sectors, while the stimulus from tax cuts to both consumers and business is fading,” Hazelton said in a press release.
The industry expects moderate growth of more than 5 percent, and 4 percent in 2020 and 2021. In the U.S., not one state has a decline in construction, and there are no signs of recession. However, weakness in core markets suggest that any forecast risk is on the downside. According to Hazelton, there is also an upside from an infrastructure bill.
“The exact gain to rental would depend upon size, time span, and composition of the bill,” he said. “But something on the scale proposed by the President and Congressional leaders last week has to potential to boost equipment rental revenue by up to 10 percent from its baseline.”
Markit suggests overall rental revenue, including event rental, could surpass $61.3 billion in 2019, including $55.8 billion in the U.S., up 5.0 percent compared to 2018. Growth is expected to reach $69.8 billion in revenue by 2022.
The current figures (updated quarterly) project slightly less growth than what was forecast in February, but continues similar steady growth.
In the U.S., equipment and event rental revenue is expected to grow another 4.2 percent in 2020, 4.3 percent in 2021, and 4.7 percent in 2022 to reach $63.5 billion.