Rental industry revenue is projected to grow at least 7 percent per year through 2018, according to projections by the American Rental Association (ARA) in its ARA Rental Market Monitor forecast.
Total equipment rental revenue is expected to grow 7.3 percent in 2015, 7.8 percent in 2016, 7.3 percent in 2017, and 7.4 percent in 2018. ARA expects 2019 revenue to grow 6.5 percent to $50.6 billion.
Revenue should reach $38.3 billion this year, ARA forecasts. The commercial and residential construction markets are growing, although slower demand is showing in the mining, oil and gas markets.
In Canada, equipment rental revenue is forecast to increase 2.6 percent in 2015 to reach $4.04 billion. The growth rate is projected to increase 3.1 percent in 2016, 3.9 percent in 2017, 6.4 percent in 2018 and 4.5 percent in 2019 to reach $4.83 billion. For North America, with the U.S. and Canada combined, total equipment rental revenue is forecast to be $43.3 billion in 2015, up 6.8 percent, reaching $56.6 billion in 2019.
“The equipment rental industry continues on an upward trajectory and is expected to show significantly strong growth through 2019. Some specific market conditions may change, but rental companies are agile and can adapt their inventory and fleet to fit what the market demands,” says Christine Wehrman, ARA executive VP/CEO. IHS Economics, the respected economic forecasting firm that compiles data and analysis for the ARA Rental Market Monitor, said U.S. expansion is back on track as growth resumed in the second quarter, led by a pickup in consumer spending, but tempered by a slowing in inventory investment.
In addition, IHS Economics said consumer spending is currently supported by gains in employment, real disposable income, and asset values, and that housing markets should steadily recover in response to rising employment, easing credit standards, and pent-up demand. “In general, we are seeing positive economic forces favoring the equipment rental industry that outweigh any negative market forces. That leads to rental companies showing more confidence and increasing investments in fleets that will support the growth of the industry,” Wehrman says.
Rental companies, according to the ARA Rental Market Monitor, are forecast to invest nearly $12.6 billion this year in equipment, increasing to $13.5 billion in 2016 and $14.1 billion in 2017. Investment as a share of revenue is expected to be more than 32 percent for each of the next three years.