ARA crunches the numbers for growth
In its latest five-year forecast, the American Rental Association projects U.S. equipment and event rental industry revenue to grow consistently on an annual basis, resulting in total revenue of $64.1 billion in 2022.
The rental tool segment produced the most consistently strong forecast numbers, followed by the party rental segment.
While the quarterly updates for ARA Rentalytics have shown minor up and down fluctuations over the past few years, the May 2018 update is the first to project larger increases in revenue almost across the board when compared to the previous forecast.
For example, the latest update expects revenue to total $52.3 billion in 2018 instead of the $51.5 billion forecast in February.
The general tool forecast calls for the following growth rates:
2018: 5.7% growth
2019: 6.5% growth
2020: 8.7% growth
2021: 7.0% growth
2022: 6.5% growth
The U.S. party and special event segment has the following projections:
2018: 6.9% growth
2019: 6.5% growth
2020: 6.2% growth
2021: 1.1% growth
2022: 1.1% growth
Overall, the forecast calls for a continuation of rental industry growth that started soon after the recession that has been stronger than the growth of the economy in the United States over that time.
“The economy is growing somewhat faster than expected and much of that is related to capital spending,” says Scott Hazelton, managing director, IHS Markit, Cambridge, Mass., the global business information provider that compiles data and analysis for ARA Rentalytics.
“While construction is not particularly strong, it has improved. On a year-over-year basis, through the April Census report, construction spending had picked up, with the six-month annualized increase of 8.7%, up significantly from the 12-month increase of 3%. Despite uncertainty on tariffs, trade and Middle East policy dangers, business and consumer sentiment remain strong,” Hazelton says.
According to ARA Rentalytics, U.S. construction rental revenues are forecast to grow by 6.1% to reach $36.2 billion and to increase another 5.7% in 2019, 5.3% in 2020, 4.2% in 2021 and 3.5% in 2022.
“This has been a slow, but durable expansion and rental has held its own in penetration within construction markets and there is anecdotal evidence to suggest that it has gained penetration outside rental markets. The rental industry has been able to not only maintain pace with economic growth, but exceed it,” Hazelton says.
The rental tool segment produced the most consistently strong forecast numbers, followed by the party rental segment.
While the quarterly updates for ARA Rentalytics have shown minor up and down fluctuations over the past few years, the May 2018 update is the first to project larger increases in revenue almost across the board when compared to the previous forecast.
For example, the latest update expects revenue to total $52.3 billion in 2018 instead of the $51.5 billion forecast in February.
The general tool forecast calls for the following growth rates:
2018: 5.7% growth
2019: 6.5% growth
2020: 8.7% growth
2021: 7.0% growth
2022: 6.5% growth
The U.S. party and special event segment has the following projections:
2018: 6.9% growth
2019: 6.5% growth
2020: 6.2% growth
2021: 1.1% growth
2022: 1.1% growth
Overall, the forecast calls for a continuation of rental industry growth that started soon after the recession that has been stronger than the growth of the economy in the United States over that time.
“The economy is growing somewhat faster than expected and much of that is related to capital spending,” says Scott Hazelton, managing director, IHS Markit, Cambridge, Mass., the global business information provider that compiles data and analysis for ARA Rentalytics.
“While construction is not particularly strong, it has improved. On a year-over-year basis, through the April Census report, construction spending had picked up, with the six-month annualized increase of 8.7%, up significantly from the 12-month increase of 3%. Despite uncertainty on tariffs, trade and Middle East policy dangers, business and consumer sentiment remain strong,” Hazelton says.
According to ARA Rentalytics, U.S. construction rental revenues are forecast to grow by 6.1% to reach $36.2 billion and to increase another 5.7% in 2019, 5.3% in 2020, 4.2% in 2021 and 3.5% in 2022.
“This has been a slow, but durable expansion and rental has held its own in penetration within construction markets and there is anecdotal evidence to suggest that it has gained penetration outside rental markets. The rental industry has been able to not only maintain pace with economic growth, but exceed it,” Hazelton says.