Revenue growth for the equipment rental industry in the United States will continue to outperform the general economy in 2013. According to the latest American Rental Association (ARA) forecast from the ARA Rental Market Monitor™ updated last week, industry revenue will grow another 7.6 percent to reach $33.5 billion next year.
The forecasted growth rate for the equipment rental industry — including construction/industrial, general tool/homeowner and party/special event segments — is more than four times the expected 2013 growth in gross domestic product (GDP) in the United States.
This, however, is just the beginning. Equipment rental industry revenue is forecasted to grow even faster in 2014 and 2015 with total annual revenues surpassing $45.3 billion in the U.S. before the end of 2016.
“Next year will be a year of transition to 2014 and beyond and it will get even better for the equipment rental industry,” says Scott Hazelton, a senior partner with IHS Global Insight, the respected economic forecasting firm based in Lexington, Mass., which compiles data for the ARA Rental Market Monitor service.
“The equipment rental industry will continue to be on the leading edge of the U.S. economic recovery,” says Christine Wehrman, ARA’s executive vice president and CEO.
“ARA continues to track the market via IHS Global Insight data and reported through the ARA Rental Market Monitor. The outlook through 2016 reflects significant growth, with double-digit increases forecasts for 2014 and 2015. Our members have an excellent opportunity in the coming year and beyond to grow their businesses and continue to show customers the value of rental,” Wehrman says.
ARA also forecasts a significant increase in equipment investment by equipment rental companies of more than 20 percent in 2014 and 2015.
“Our forecasts show growth in construction spending will be double-digit in 2014 and 2015, so there will be strong demand with a broad-based recovery,” Hazelton says.
“If you have a fleet designed for the present market, you will need to pick that up in 2014 to meet increased demand. In a recovery, you see increases and plateaus. You will see an increase next year and more in 2014 with a new peak or plateau in 2015 as higher demand and higher rental penetration pushes up revenue and investment,” he says.