Number of tons of water-chilling and air-conditioning equipment provided by Aggreko for the 2013 PGA Championship held Aug. 5-12 at Oak Hill Country Club in Rochester, N.Y. The company also provided 8,200 kW of power generators, 2,360 tons of cooling equipment,
34 miles of cable and 15 technicians for installation and operation.
Amount of common stock Caterpillar, Peoria, Ill., plans to repurchase from Société Générale with an accelerated stock repurchase transaction expected to be completed in September.
ARA’s July economic survey shows optimism
American Rental Association (ARA) equipment rental store owners and managers as well as product suppliers to the industry continue to have an optimistic outlook for growth in 2013.
Nearly 84 percent of those responding to the July 2013 ARA Economic Survey continue to project an increase in rental revenue this year over 2012, with 43 percent expecting double-digit growth. More than 93 percent expect rental revenues to at least equal those of 2012.
In order to support this anticipated growth, respondents are adding to their rental inventory. Nearly 67 percent of survey participants expect new rental purchases to increase in 2013 over 2012, with 37.5 percent expecting double-digit increases in spending on new equipment. Overall, more than 85 percent of the respondents expect to buy at least as much new rental equipment as they did in 2012.
ARA equipment manufacturers are preparing for this additional purchasing. In a separate survey, also conducted in July, more than 95 percent of ARA equipment manufacturers and suppliers said they expect increased sales into the rental channel in 2013. More than 50 percent forecast double-digit growth and overall, 100 percent of those responding to the survey expect sales into the rental market to at least equal 2012.
The ARA economic surveys reflect a snapshot in time of those who responded and may not be representative of the industry as a whole. However, rental companies and suppliers/manufacturers can benchmark their businesses against these results. RM
— Sarah Peterson
U.S. rental revenue to outpace general economy
The equipment rental industry in the United States continues to outpace gross domestic product (GDP) in the U.S. by four times in 2013, according to the American Rental Association’s (ARA) latest forecast from the ARA Rental Market Monitor™. Revenues will reach $33.5 billion in revenue, representing a 7.0 percent increase over 2012 with revenue growth reaching 7.8 percent in the fourth quarter according to the latest quarterly forecast updated July 29, 2013.
Economic data and analysis for the ARA Rental Market Monitor is compiled by IHS Global Insight, one of the world’s most respected economic forecasting firms based in Lexington, Mass.
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 percent, real residential construction is expected to grow 8.2 percent, yielding an overall real construction growth rate of 2.6 percent in 2013. Real consumer spending is projected to increase 1.9 percent in 2013, with spending on recreational services forecast to grow 1.3 percent. These improvements will translate into increased revenue in all segments of the equipment rental market,” according to the U.S. economic analysis from the ARA Rental Market Monitor.
The construction and industrial equipment segment is forecast to grow 8.1 percent in 2013, while general tool segment revenue is expected to increase 5.4 percent over 2012. Party and event rental revenue is forecast to increase 2.4 percent. The second quarter of 2013 is projected to be the slowest growth 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 percent growth in U.S. equipment rental revenue followed by 12.9 percent
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 percent increase, and to continue growing throughout the forecast to reach nearly $5.4 billion in rental revenue in 2017.
“As we look toward the third quarter of the year, we continue to see significant growth opportunity in succeeding future years for equipment rental. The dynamics of the economy drive this industry, along with individual management initiative. Rental operators adeptly balance these factors to build their rental revenue volume. Rental penetration also continues its growth pattern, as the customer base relies on rental as a preferred business option,” says Christine Wehrman, ARA’s executive vice president and CEO.
“The U.S. economy slowed more than expected in the first half of the year, but equipment rental demand has remained strong,” says Scott Hazelton, a senior partner with IHS Global insight, which compiles data and analyses for the ARA Rental Market Monitor.
“We have lowered our growth expectations for 2013 modestly to reflect this, but rental growth will still handily outperform the overall economy. The path ahead still looks promising with employment growth continuing and housing data coming in strong, which implies an improving commercial construction market to follow. Industrial markets, especially those tied to energy exploration and production, also should see growth,” Hazelton says.
The ARA Rental Market Monitor is a subscription-based service for American Rental Association (ARA) members provided by ARA and Rental Management as part of a partnership with IHS Global Insight.