Rental Industry Remains on Course for Record 2016 Revenue, IHS Says
The rental industry in the United States will grow by 5.6 percent in 2016 and 4.9 percent in 2017 according to a forecast released this week by the American Rental Association. The numbers are slightly modified from the association’s first quarter forecast.
ARA’s projections are for total revenue in the U.S. to reach $47.9 billion including construction/industrial, general tool and party and event segments. ARA predicts revenue will climb to $55.6 billion in 2019.
The ARA’s forecast for Canada now calls for a 2.2 percent decrease in total rental revenue to $4.83 billion because of a 2.9-percent decline in construction and industrial equipment rental revenue in 2016. ARA expects general tool to increase 0.8 percent and party and event to increase 0.5 percent this year. ARA predicts Canadian equipment rental revenue to increase about 4.7 percent in 2017 and grow to $5.64 billion by 2019.
“The adjustments in our forecast reflect changes in the outlook for the entire economy,” said John McClelland, ARA vice president for government affairs and chief economist. “The fact that the equipment rental industry continues to have revenue growth more than double that of the U.S. economy as a whole underscores the positive aspects of this latest forecast by IHS.”
“The U.S. economy continues to expand,” added Scott Hazelton, managing partner of IHS Global Insight, Lexington, Mass. “The wild card is that much of the global economy has failed to ignite. Sluggish growth from U.S. trading partners continues to weigh on oil prices, preserve the high value of the dollar and subdue business confidence in key industries. The lingering weakness in manufacturing and energy markets will limit rental revenue growth somewhat more than expected, but construction and home renovation remain strong. We have lowered the growth rate by about 150 basis points, but the outlook remains fundamentally strong at about twice the growth rate of gross domestic product in the U.S.”
