The American Rental Association (ARA) indicates in its updated forecast that the United States equipment rental industry’s growth will soften but still grow.
Last quarter, the year-over-year growth was expected to be 4.7 percent in 2023 and 2.1 percent in 2024. The most current projections indicate 7.6 percent growth in 2023 totaling $60.4 billion in construction and general tool rental revenue. As for 2024, a 3.1 percent revenue increase is now expected.
"While the growth has softened, we're looking at a more optimistic outlook than we were a quarter ago. The recession fears we had have subsided," says Scott Hazelton, managing director at S&P Global.
“After talking with many manufacturers and operators at Conexpo and in the weeks after, it’s clear the headwinds are still there,” says Tom Doyle, ARA VP of program development. “Inflation is still high, interest rates are still high and they may continue to rise, while issues remain with labor shortages and supply.”
However, investment in the construction industry and construction employment approaches a record high.
Also evident is rental companies’ ability to adapt.
“I continue to marvel at the adaptability of our members. They have found ways to overcome these headwinds and provide solutions for their customers,” Doyle says.
Last quarter, ARA members were asked about the current situation of equipment rental and 18 percent of respondents believed the situation was getting better. This quarter, 32 percent of respondents indicated a more positive outlook with 86 percent of respondents reflecting a generally positive sentiment.
Looking to the second quarter, ARA members were asked if they expect a revenue change compared to the same quarter last year. Results show that 76 percent of respondents believe their revenues will increase compared to quarter two in 2022.
Source: ARA
