The American Rental Association's (ARA) quarterly forecast predicted that United States equipment rental industry’s growth will soften but still grow.
"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," said Scott Hazelton, managing director at S&P Global.
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.
“After talking with many manufacturers and operators at CONEXPO-CON/AGG and in the weeks after, it’s clear the headwinds are still there,” said Tom Doyle, ARA vice president 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.”
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.
Additionally, investment in the construction industry and construction employment approaches a record high. Also evident is rental companies’ adaptiveness.
In Canada, equipment rental revenue growth is higher in 2023 compared to last quarter’s data due to inflation and resilient demand. At the end of 2022, the Canadian equipment rental revenue forecast for 2023 was -0.3 percent and 4.7 percent for 2024. Now, Canadian equipment rental revenue growth (construction and general tool combined) is projected to be 2.9 percent in 2023 and 4.3 percent in 2024, totaling $4.6 billion and $4.8 billion respectively.
Finally, looking at 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.
