A new five-year forecast for equipment rental industry revenues released
by the American Rental Association (ARA) shows a moderate strengthening
compared to the November forecast. ARA now projects U.S. equipment
rental revenue will reach $48.9 billion in 2017, but then grow at an
average annual rate of 4.3 percent over the forecast to top $56 billion
“Growth is primarily driven by strength in both residential and
nonresidential construction, as well as consumer spending,” said John
McClelland, ARA vice president for government affairs and chief
“The big question is how much additional spending is forthcoming under
the new administration of President Trump. Our current view is that
increasing infrastructure spending is more likely to affect the out
years of our forecast,” McClelland said.
Construction and industrial equipment rental revenue is forecast to grow
by 3.7 percent in 2017, 4.2 percent in 2018, 5 percent in 2019 and 4.2
percent in 2020. McClelland said revenues for the general tool segment
are expected to grow even faster during the out years of the forecast
due to the continued improvement in the U.S. housing market, with
increases of 2.9 percent in 2017, 5.1 percent in 2018, 5.3 percent in
2019 and 6.6 percent in 2020.
Quarterly updates in 2016 previously showed positive expectations, but
included a very gradual slowing in the expected growth of rental
revenues over the year, according to figures compiled by IHS Markit™,
the economic forecasting firm that compiles data for the ARA
Rental Market Monitor™ subscription service as part of a
partnership with ARA and RENTAL MANAGEMENT.
The first new quarterly forecast for the ARA Rental Market Monitor
in 2017, however, reverses the trend with an expected gradual increase
compared to last quarter’s forecast.
“The early initiatives from the Trump administration signal increased
investment in infrastructure, a more accommodative energy policy, and a
more business-friendly tax and regulatory climate. The results of these
policies will not affect 2017, but will improve our outlook relative to
baseline in 2018 and beyond. The nature of tax and regulatory reform is
that they play out over a number of years, hence, improved growth
compared to our prior forecast for 2018-2020,” said Scott Hazelton,
managing director, IHS Markit™.
The latest ARA Rental Market Monitor forecast for Canada
projects $5.148 billion in equipment rental revenue in 2017, which
reflects a gradual slowing in growth rates to 3.3 percent compared to
the November forecast.
The 2018 forecast of 3.8 percent growth and 2019 of 3.9 percent also
reflect a gradual slowing compared to the November forecast. However,
the current forecast for 2020 is for a more robust 5.3 percent growth in
equipment rental revenue in Canada to reach $5.849 billion, which is
greater than the November forecast.
About ARA: (www.ARArental.org)
The American Rental Association, Moline, Ill., is an international
trade association for owners of equipment rental businesses and the
manufacturers and suppliers of construction/industrial, general tool and
party/event rental equipment. ARA members, which include more than
10,000 rental businesses and more than 1,000 manufacturers and
suppliers, are located in every U.S. state, every Canadian province and
more than 30 countries worldwide. Founded in 1955, ARA is the source for
information, advocacy, risk management, business development tools,
education and training, networking and marketplace opportunities for the
equipment rental industry throughout the world.
About IHS Markit™: (www.ihsmarkit.com) IHS
Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
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insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world’s leading financial
institutions. Headquartered in London, IHSMarkit
is committed to sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All other
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2017 IHS Markit Ltd. All rights reserved.
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