Rental Industry Still In Growth Mode, Report Indicates
Despite the still lackluster construction economy in the U.S., the equipment rental industry continues its strong growth, according to American Rental Association’s (ARA) latest forecast from the ARA Rental Market Monitor. Revenues from equipment rentals will reach $33.5 billion, representing a 7% increase over 2012, the ARA said. Growth is expected to hit 7.8% in the fourth quarter, according to the latest quarterly forecast updated July 29.
In the U.S., the construction market and consumer spending continue to be the most important drivers of growth of the equipment rental market in 2013. “Though real nonresidential construction is forecast to decline 0.8%, real residential construction is expected to grow 8.2%, yielding an overall real construction growth rate of 2.6% in 2013,” according to the economic analysis from the ARA Rental Market Monitor. “Real consumer spending is projected to increase 1.9% in 2013, with spending on recreational services forecast to grow 1.3%.These improvements will translate into increased revenue in all segments of the equipment rental market.”
The construction and industrial equipment segment is forecast to grow 8.1% this year. The second quarter of 2013 is projected to be the slowest for the overall rental equipment market compared with 2012, but quarter-on-quarter growth is forecast to pick up in the final two quarters of the year.
The forecast for 2014 is more positive, calling for 9.2% growth in U.S. equipment rental revenue followed by 12.9% growth in 2015. By the end of 2017, equipment rental revenue in the U.S. is expected to exceed $46.5 billion.
In Canada, the equipment rental industry is forecast to generate nearly $4.6 billion in revenue in 2013 — a 2.8% increase — and to continue growing throughout the forecast to reach nearly $5.4 billion in rental revenue in 2017.
Economic data and analysis for ARA’s Rental Market Monitor is compiled by IHS Global Insight, an economic forecasting firm based in Lexington, Mass.Edit Module