ARA forecasts 12.5% revenue hike in 2022
By Belinda Smart10 August 2022
Despite economic indicators described as “mixed and uncertain” the American Rental Association (ARA) is predicting growth for equipment rental revenue in the US - albeit tempered by caution over inflation and supply delays - according to the latest quarterly update of its five-year forecast.
The update, released on 3 August, projects equipment rental revenue, including the construction and general tool segments, will grow 11.2% to nearly reach $55.9 billion in 2022.
Growth of 6.2% is predicted in 2023, 2.5% in 2024, 3.3% in 2025 and 3.7% in 2026 to total more than $65.1 billion.
For construction equipment rental revenue, the forecast calls for a 12.5% increase in 2022 to surpass $41.6 billion, with growth slowing to 7 percent in 2023, 2% in 2024, 3% in 2025 and 3% in 2026.
General tool growth is expected to be 7.4 % in 2022 and then remain steady, with 5% growth in 2023, 3% in 2024, 5% in 2025 and 5% in 2026.
Tom Doyle, ARA vice president for program development, said; “Rental revenue continues to experience significant growth, despite some headwinds in 2022.”
“The longer-term forecast, while showing slower growth than this year, remains bullish. It is generally a good time to be in the equipment rental industry,” he added.
“In these times of higher uncertainty, it is prudent to closely watch the driving factors to the forecast for changes that will affect build schedules for original equipment manufacturers (OEMs) or demand for rental companies.
“Depending on how long we have high inflation, supply chain constraints, labor shortages and climbing interest rates, those econometric drivers can have an impact on the rest of 2022 and the outlook for 2023.”
The ARA forecast for equipment rental revenue in Canada, combining construction and general tool revenue, mirrors the outlook for the US, projecting growth of 14.4% in 2022 to $4.7 billion, 6% in 2023, 2% in 2024, 3.4% in 2025 and 3.3% in 2026 to exceed $5.4 billion.