After double-digit growth in 2022, a slowdown is expected.
The American Rental Association (ARA) has provided an update to its five-year forecast.
The ARA now projects equipment rental revenue, including the construction and general tool segments, to grow 11.2% while reaching nearly $55.9 billion in 2022.
Additionally, the ARA expects growth of 6.2% in 2023, 2.5% in 2024, 3.3% in 2025, and 3.7% in 2026 to total more than $65.1 billion.
“Rental revenue continues to experience significant growth, despite some headwinds in 2022. The longer-term forecast, while showing slower growth than this year, remains bullish. It is generally a good time to be in the equipment rental industry,” said Tom Doyle, ARA vice president for program development.
For construction equipment rental revenue, the forecast calls for a 12.5% increase in 2022 to surpass $41.6 billion, with growth slowing to 7% in 2023, 2% in 2024, 3% 2025 and 3% in 2026.
General tool growth is expected to be 7.4% in 2022 and then remain fairly steady with 5% growth in 2023, 3% in 2024, 5% in 2025, and 5% in 2026.
“In these times of higher uncertainty, it is prudent to closely watch the driving factors to the forecast for changes that will affect build schedules for original equipment manufacturers (OEMs) or demand for rental companies,” Doyle said. “Depending on how long we have high inflation, supply chain constraints, labor shortages and climbing interest rates, those econometric drivers can have an impact on the rest of 2022 and the outlook for 2023.”
The ARA forecast for equipment rental revenue in Canada, combining construction and general tool revenue, closely mirrors the outlook for the U.S., projecting growth of 14.4% in 2022, 6% in 2023, 2% in 2024, 3.4% in 2025, and 3.3% in 2026.
ARA membership includes more than 11,500 rental businesses and more than 1,000 manufacturers and suppliers from the United States along with more than 40 nations worldwide.