The American Rental Association forecasts construction equipment rental in the U.S. to grow 5.2 percent in 2019, with growth rates of 2.3 percent in 2020, 3.0 percent in 2021, 3.7 percent in 2022, and 3.1 percent in 2023. The group forecasts 2023 revenue to reach $43.9 billion.
Total revenue from equipment and event rental could reach $61.56 billion in 2019. That number includes Canada and the United States, and is 5.4 percent higher than 2018, according to ARA. U.S. rental revenue is projected at $56 billion for the year. ARA’s five-year forecast is for growth through 2023, when revenue should reach $64 billion.
“Despite signs of a slowing economy, the equipment and event rental industry continues to perform well,” John McClelland, VP for government affairs and chief economist, said in a prepared statement. “The most important thing for rental companies to do is continue to execute their business plans and aggressively manage their operations.”
Although the outlook calls for slightly slower growth rates than the previous quarterly forecast in August, the industry continues to outpace the general economy in the U.S. where gross domestic product (GDP) growth slowed from a 3.1 percent annual growth rate in the first quarter to 2.0 percent in the second quarter. The third quarter GDP growth estimate is 1.9 percent.
According to IHS Markit, the forecasting firm that compiles data for, new tariffs on U.S.-China trade flows and diminishing fiscal stimulus could contribute to a slowdown in annual real GDP growth from 2.3 percent in 2019 to 2.0 percent in 2020 and 2021, and 1.7 percent in 2022.
“With chances of a recession in the next 12 months relatively low at 35 percent, rental businesses should be able to continue to grow revenues and maintain strong balance sheets,” McClelland said in the statement.
The next 12 to 18 months will feature significant uncertainty around trade and fiscal policy, compounded by the U.S. elections, according to HIS Markit.
“Rental firms are well positioned for uncertain times,” said Scott Hazelton, managing director, in a prepared statement. “The reluctance of construction and industrial companies to invest in new equipment under these circumstances, combined with a still expanding economy, suggests that the opportunities for equipment rental will continue to grow, albeit at a slower pace than the past few years,” Hazelton says.