The American Rental Association‘s updated forecast calls for equipment and event rental revenues in North America to surpass $61.3 billion this year, including $55.8 billion in the United States and $5.3 billion in Canada.
This is the second drop in ARA’s quarterly rental forecast. The current forecast calls for rental revenues to be up 5 percent compared with 2018, down slightly from ARA’s projections of 5.3 percent growth in February. At that time, ARA projected U.S. rental to grow 4.8 percent in 2020, 5 percent in 2021 and 4.8 percent in 2022.
These estimates have declined from ARA’s October quarterly forecast of 5.5 percent in 2019, 5.9 percent in 2020, 5.1 percent for 2021 and 4.7 percent in 2022.
ARA currently projects U.S. equipment and event rental revenue to grow 4.2 percent in 2020, 4.3 percent in 2021 and 4.7 percent in 2022 to reach $63.5 billion.
Still outpacing economy
ARA says that although current figures project less growth than February and last October’s forecasts, the report “continues to forecast similar steady growth, outpacing the overall economy.”
“The outlook continues to be positive,” says John McClelland, ARA vice president for governmental affairs and chief economist. Adds Scott Hazelton, managing director for IHS Markit: “The outlook for the equipment rental industry calls for expected growth, although at reduced rates. The maturing economy, combined with trade issues, offers more limited opportunities to the construction and manufacturing sectors, while the stimulus from tax cuts to both consumers and business is fading.” Forecasting firm IHS Markit compiles the report’s data and analysis in partnership with ARA.
Hazelton stressed that “there are no signs of recession. However, weakness in core markets suggest that any forecast risk is on the downside and our forecast has evolved lower over the past six months.”
One potential upside is the proposed $2 trillion infrastructure package, the subject of a recent meeting between President Trump, House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer in early May.