The forecast for the equipment rental industry remains bright according to the latest data released by the American Rental Association (ARA), despite a slowdown in overall economic growth in the second quarter of 2012.
ARA anticipates North American equipment rental industry revenue to increase by 8.2 percent in 2012 to reach $34.0 billion by year end. The growth is fueled by a strong revenue growth projection of 9 percent in the construction and industrial equipment segment to $22.7 billion and 8 percent in the general tool segment to $8.7 billion. The party and event segment is expected to grow 3.1 percent in 2012 to reach $2.6 billion in revenue.
The projections are based on the industry’s recently updated quarterly figures by IHS Global Insight, one of the world’s leading economic forecasting firms and a partner with ARA and Rental Management in providing data and analyses for the ARA Rental Market Monitor™ subscription service for association members.
Economic growth expectations are consistent with the prior quarter and remain bullish. The industry continues to outperform the U.S. economy at a rate more than four times that of the gross domestic product (GDP) in the United States.
The ARA Rental Market Monitor current five-year forecast calls for steady, high single-digit growth in 2013 with double-digit revenue growth for the equipment rental industry in 2014, 2015 and 2016 to reach total North American rental revenue of $51.7 billion in 2016.
Also signaling a growth trend for the industry is the rate of investment in equipment, now projected by ARA to reach $9.85 billion in 2012, up more than 15 percent over 2011. This means investment in equipment as a percentage of sales is forecasted to be 31.7 percent this year. The percentage increase in equipment investment is expected to be even greater over the next three years.
“The equipment rental industry continues to be a leader in recovery of our economy. The growth rate we’re seeing over 2011 is substantial, further demonstrating the significant value proposition that renting equipment has to offer,” says Christine Wehrman, ARA’s executive vice president and CEO.