A new report from the American Rental Association (ARA) projects that the equipment rental industry in the United States will generate $35.8 billion in revenue and outpace gross domestic product (GDP) by more than four times in 2014.
The projection was released in the latest forecast from the ARA Rental Market Monitor. Economic data and analysis for ARA Rental Market Monitor are compiled by IHS Inc., a global source of critical information and insight.
In the U.S., total equipment rental revenue is forecast to grow 7.6% in 2014, reaching $35.8 billion; 10.5% in 2015, reaching $39.6 billion; and another 10.2% in 2016, to reach $43.6 billion. That will surpass the previous industry record of $36.9 billion, set in 2007.
The growth rate is expected to be 8.9% in 2017 and 7.7% in 2018, with total rental revenue of $51.2 billion.
“The U.S. economy slowed more than expected in the first half of the year, but equipment rental demand has remained strong and rental growth will still handily outperform the overall economy," said Scott Hazelton, managing director with IHS Global Insight. "Looking forward, commercial construction and housing starts will contribute to growth in the construction and industrial and general tool segments.”
Over the next two years, the construction and industrial segment and the general tool segment will experience double-digit growth in U.S. rental revenue. In 2015, construction and industrial rental revenue is projected to increase 10.7% and general tool 11.7%. In 2016, the general construction and industrial rental should see revenue increase by 10.4%, and the the general tool segment see an 11.6% increase.
The party and event segment is expected to continue it same steady growth in 2014, with revenue increasing 4.2% to reach $2.6 billion in the U.S.
The forecast for Canada calls for 5.2% growth in 2014 to $4.9 billion, with growth of 6.0% in 2015, 6.6% in 2016, 3.5% in 2017, and 3.6% in 2018, to total $5.9 billion at the end of the latest forecast.
It is also expected that rental companies in the U.S. will continue to invest more than 30% of revenue in new equipment over the next five years. Total investment, according to the ARA Rental Market Monitor, is projected to reach $12.1 billion in 2014 and grow to $16.1 billion by 2018.
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