North American Rental Market Tops $42 Billion, ARA Study Says

The total size of the North American rental market was $42.3 billion in 2007, according to the American Rental Association’s 2007 State of the Industry report, released last week at The Rental Show in Las Vegas. The $42.3 billion figure included $36.5 billion in the United States and $5.8 billion in Canada.

The comprehensive report was produced by Global Insight, a Lexington, Mass.-based economic forecasting and consulting firm. This is the third year ARA and Global Insight have joined forces to produce the industry research study, which includes updated revenue estimates for 2006 and 2007, and looks forward with a five-year forecast through 2012.

“The North American equipment rental industry is the largest in the world, generating $42.3 billion in combined 2007 rental revenues in the USA and Canada, and is a significant contributor to the gross national product of both countries,” said Christine Wehrman, CEO of ARA.

Global Insight forecasts a continued growth trend, projecting North American rental revenues to exceed $52 billion in 2012. According to the study, the U.S. rental market has had a compound annual growth rate of 7.9 percent, significantly outpacing overall economic activity. Although the study predicts continued growth, it expects the compound annual growth rate to slow to 4.1 percent in the years 2007 through 2012.

The U.S. construction and industrial equipment revenue topped $25.1 billion in 2007. The party and event rental revenue reached $2.1 billion in the U.S. in 2007, the study says, and will be the strongest performing segment during the forecast period.

General tool rental has been the fastest-growing U.S. market segment during the past decade, the study said, with 11.6 percent compound annual growth from 1998 to 2007. The segment accounted for $8.5 billion in rental revenue in 2007.

Canada shows the strongest growth during this period, particularly in the Western provinces. The construction and industrial equipment rental category makes up the largest share of the Canadian rental market with U.S. $4.3 billion in rental revenue in 2007. Canada’s general tool segment produced U.S. $4.1 billion in 2007 revenue, with party and event rental revenue totaling $157 million in 2007.

The 2007 report includes more than 160 pages of statistical information, an industry overview, an investment outlook, regional analysis, market penetration in the construction and industrial segment, pricing power and market dynamics, competitive trends and composition of the marketplace with individual review of the three key industry segments.

The report is available to ARA members for $695 and non-members for $2,995, and can be obtained from ARA.