The American Rental Association forecasts equipment rental revenue to grow by 10.2 percent in 2022 to reach $52.7 billion in the United States. The numbers were released in its latest quarterly forecast.
ARA forecast revenue to grow 6 percent in 2023, 2.9 percent in 2024, and 3.4 percent in 2025. Revenue for 2025 is expected to by nearly $60 billion.
“This is a market that will surpass the peak revenue levels of 2019,” said Scott Hazelton, director, economics and country risk for IHS Markit, in a prepared statement. “That means the impact of the coronavirus on equipment rental revenue will be unwound by the end of the year.”
IHS Markit provides data and analysis for the ARA report.
Construction and industrial equipment revenue is expected to grow 12 percent in 2022 to $38.9 billion, and general tool rental is expected to grow by 5 percent to $13.9 billion.
The report cites inflation as an uncertainty that could affect the forecast, however, which currently stands at 7.5 percent.
“It is clear that supply chains have a lot to do with the current inflation rate, and unwinding the current backlogs will increase the supply of goods and bring prices back down,” said John McClelland, chief economist for ARA.
“However, if it takes to long to unwind the supply chain bottlenecks, inflation can get backed into things like wages and cause the Federal Reserve to act more aggressively, slowing economic growth, which could have negative effects on the equipment and event rental industry,” he said.
Although supply chain issues have caused delays in delivery of fleet to equipment rental companies, ARA projects a 36.7-percent increase in investment in inventory in 2022, totaling $14.4 billion. The forecast calls for another 10.1-percent bump next year, for $15.9 billion of spending in 2023.
Source: ARA
