For the second quarter in a row, the American Rental Association is projecting larger increases in revenue almost across the board for the equipment and event rental industry compared to its previous five-year forecast released in May.
The July 2018 forecast from ARA Rentalytics estimates total U.S. rental revenue of $53.04 billion in 2018, a 7.6-percent increase. The projection expects revenue to grow 5.8 percent in 2019, 5.8 percent in 2020, 5.1 percent in 2021 and 4.7 percent in 2022 to reach $65.4 billion.
The May forecast projected total U.S. rental revenue of $52.3 billion in 2018, growing to $64.1 billion to 2022.
“ARA’s second quarter forecast shows continued strong growth in rental revenues over the forecast period,” said John McClelland, ARA’s vice president of government affairs and chief economist. “Growth rates for 2018 and 2019 look particularly strong in all segments of the equipment and event rental industry with growth rates forecast at more than double the rate of GDP [gross domestic product] growth.”
While the near-term outlook is particularly strong, McClelland said the out-years of the forecast could be subject to change because of the potential impact of tariffs on the economy and construction projects.
“Coupled with the increases in equipment prices that are almost inevitable after the imposition of tariffs on steel and aluminum, the equipment and event rental industry could face a challenging economic climate beginning in 2020 and beyond,” McClelland added.
According to ARA Rentalytics, construction and industrial equipment rentals continues to account for the largest portion of the revenue, and is now expected to reach $37.15 billion in 2018, up 8.3 percent compared to last year. General tool rental revenue in 2018 is forecast to be $12.49 billion, up 5.4 percent. Party and event revenue is expected to reach $3.4 billion in 2018, an 8.8-percent increase.
ARA also forecasts total investment by rental companies to reach $13.9 million in 2018, up 7.8 percent compared to 2017.
In Canada, ARA forecasts $5.4 billion in revenue in 2018, up 4.4 percent, with 4.8 percent growth in 2019, 4.7 percent in 2020, 3.8 percent in 2021 and 2.7 percent in 2022 to reach $6.159 billion.
