Growth in the North American equipment rental industry will slow over the next five years with a recession and an anticipated reduction in demand, according to the latest American Rental Association forecast.
Single-digit percentage increases are expected in equipment rental revenue, including construction and general tool. For 2023, ARA projects an increase of 3.4% to nearly $57.7 billion, after 11% growth in 2022 to reach $55.8 billion.
“In the current forecast we see a definite softening in rental revenue growth, but we do not see negative growth,” said John McClelland, ARA vice president for government affairs and chief economist.
Beyond 2023, equipment rental revenue is expected to grow 2.9% in 2024, 3.3% in 2025, and another 3.4% in 2026 to reach nearly $63.4 billion.
“There is variability in the forecast, depending on the end markets rental companies serve,” said Tom Doyle, ARA vice president for program development. “Nonresidential construction spending will be strong, and money continues to be spent from government stimulus programs, which both are positives for the rental industry.”
The construction and industrial segment, according to S&P Global Market Intelligence, the forecasting firm that compiles data for the ARA forecast, showed double-digit revenue increases in 2021 and 2022 at 10.2 and 12.7%, respectively.
Growth in the segment is forecast to slow to a 4% increase in 2023, 2% in 2024, and 3% in 2025 and 2026.
