Next 5 Years Look Strong For Rental
By Mike Osenga21 May 2018
The American Rental Association (ARA) is forecasting that U.S. equipment and event rental industry revenue is expected to grow consistently on an annual basis, resulting in total revenue of $64.1 billion in 2022. The results are from the association’s latest five-year forecast, developed with IHS Markit, ARA’s research partner.
ARA said that while its quarterly updates have shown minor fluctuations up and down over the past few years, the May 2018 update is the first to project larger increases in revenue almost across the board when compared to the previous forecast. For example, the latest update expects revenue to total $52.3 billion in 2018 instead of the $51.5 billion forecast in February.
“The economy is growing somewhat faster than expected and much of that is related to capital spending,” says Scott Hazelton, managing director, IHS Markit. “While construction is not particularly strong, it has improved. On a year-over-year basis, through the April Census report, construction spending had picked up, with the six-month annualized increase of 8.7% , up significantly from the 12-month increase of 3%. Despite uncertainty on tariffs, trade and Middle East policy dangers, business and consumer sentiment remain strong,” Hazelton says.
According to ARA Rentalytics, U.S. construction rental revenues are forecast to grow by 6.1% to reach $36.2 billion and to increase another 5.7% in 2019, 5.3% in 2020, 4.2% in 2021 and 3.5% in 2022.
“This has been a slow, but durable expansion and rental has held its own in penetration within construction markets and there is anecdotal evidence to suggest that it has gained penetration outside rental markets. The rental industry has been able to not only maintain pace with economic growth, but exceed it,” Hazelton says.