Equipment rental revenues expected to grow 8 percent in 2014
Equipment rental industry revenues have been growing at a rate of about four times more than the general economy over the past few years. Now, as the industry heads into 2014, equipment rental is poised for even greater growth.
The latest forecast released by the American Rental Association (ARA) from its ARA Rental Market Monitor™ service projects equipment rental industry revenue in North America will grow 8 percent in 2014 to reach $41 billion after growing an estimated 6.2 percent in 2013.
In 2017, North American equipment rental revenues are expected to top $51.8 billion. These figures include revenue for all three segments of the equipment rental industry — construction/industrial, general tool/DIY and party/special event — in both the U.S. and Canada combined.
In the U.S., revenues are expected to grow 8.4 percent in 2014 and 11.3 percent in 2015 as a number of factors positively impact the industry.
“The industry remains vibrant and strong, and will benefit even more in the coming years due to nonresidential growth, supplemented with residential construction growth and the strong influence of the energy boom in North America,” says Christine Wehrman, ARA’s executive vice president and CEO.
The latest update to the ARA Rental Market Monitor North American Economic Analysis provided by IHS Global Insight projects revenue growth to accelerate in all segments through 2015 before leveling off in 2016 and 2017.
The general tool segment will show the highest compound annual growth rate (CAGR) at 10.1 percent over the five-year forecast while construction and industrial equipment revenue is forecast to see a CAGR of 7.8 percent between 2013 and 2017.
In the U.S., the construction market and consumer spending are expected to be the most important drivers of growth for the equipment rental market. According to the U.S. economic analysis from the ARA Rental Market Monitor and IHS Global Insight, the U.S. equipment rental market is expected to continue its upward trajectory and show strong growth through 2017.
Strong growth in residential and commercial construction through 2015 is expected to fuel the construction and industrial equipment segment, which is projected to grow 9.1 percent in 2014 and 10.5 percent in 2015 with the segment’s revenue reaching $31 billion in 2017.
The U.S. general tool segment is expected to grow 7.9 percent in 2014 and 15.5 percent in 2015, and then reach $12.4 billion in 2017. The ARA Rental Market Monitor also forecasts party and event rentals to benefit from continued improvement in consumer spending with rental revenue projected to show a 3.2 percent CAGR over the five-year forecast to 2017, reaching $2.9 billion.
Overall in the U.S., total equipment rental revenue is expected to grow at a CAGR of 8.6 percent between 2013 and 2017, exceeding pre-recession total revenue in 2015 and reaching $46.3 billion in 2017.
Investment in equipment by U.S. rental companies is expected to grow 10.3 percent in 2014, but jump by another 21.2 percent in 2015 to surpass $14.7 billion.