IHS has revised downward its estimate of growth in the equipment rental industry in the United States to 7.3 percent to $35.7, replacing its previous estimate of 7.6 percent growth to $35.8 billion, the American Rental Association reports. Still, the industry’s growth rate will more than triple the expected growth in gross domestic product in the U.S. in 2014 and exceed the growth of the industries it serves.
“The revision in our expectations has to do with the general economy and with the construction industry, where growth this year has not met expectations,” said Scott Hazelton, director of industry consulting at IHS. “Construction will continue to improve in the fourth quarter, but it is not likely to accelerate enough to reach our earlier projections.”
In 2015, equipment rental revenue is expected to grow another 9.2 percent to reach $39 billion, followed by growth of 7.7 percent in 2016, 8.5 percent in 2017 and 9.3 percent in 2018, reaching $49.8 billion.
During the next four years, the construction and industrial segment and the general tool segment will experience near double-digit growth in U.S. rental revenue. In 2015, construction and industrial rental revenue is projected to increase 9.8 percent and general tool 9.0 percent, followed by 7.9 percent and 8.1 percent in 2016, 8.6 percent and 9.8 percent in 2017 and 9.0 percent and 11.8 percent in 2018, respectively.
The party and event segment is expected to continue its same steady growth, with revenue increasing 4.2 percent in the U.S. in 2014 to reach $2.6 billion, followed by growth rates of 3.9 percent, 3.5 percent, 2.5 percent and 2.7 percent for 2015 through 2018.
The forecast for Canada calls for 5.4 percent growth in 2014 to $4.9 billion, with growth of 5.2 percent in 2015, 6.8 percent in 2016, 3.5 percent in 2017 and 3.6 percent in 2018 to total $5.9 billion at the end of the latest five-year forecast.
IHS also expects rental companies in the U.S. to continue to invest more than 30 percent of their revenue in new equipment during the next five years. Total investment, the ARA Rental Market Monitor predicts, will reach $11.9 billion in 2014 and grow to nearly $15.5 billion in 2018.
