ARA projects softer rental growth in US and Canada

Image: Adobe Stock

Growth in North America’s equipment rental industry is expected to soften in 2025, according to the latest forecast from the American Rental Association (ARA).

In the US, construction and general tool rental revenue is projected to increase 3.9% next year to $80.9 billion, a slight downward revision from last quarter’s forecast of 4.2% growth to $81.2 billion.

Growth is forecast to slow further to 2.9% in 2026.

Construction and industrial equipment (CIE) rental revenue is expected to total $63.8 billion in 2025, while general tool rental revenue is projected at $17.1 billion.

Scott Hazelton, managing director at S&P Global, which compiles the data for the ARA forecast, said, “The construction and equipment rental revenue growth is softening this year from last year with inflation softening as well. 

“The One Big Beautiful Bill [Act] does allow you to expense, therefore accelerate depreciation and this does pull some spending forward, but the overall market is not growing that fast.”

Tom Doyle, ARA vice president, program development, added that some manufacturers were still benefiting from increases in rental-related sales, “[OEMs] have said they’ve seen a nice increase in their sales to rental and that segment has grown as an overall portion of their business. They think that will most likely continue and they are looking for 2026 as a slight recovery.”

In Canada, growth is also projected to slow in 2025, with the latest projection showing a 3.2% revenue increase to $5.92 billion, down from the previous estimate of 3.4% and significantly lower than the 6.2% growth seen in 2024.

“You can see the slowing from 6.2 to 3.2 this year for the combined [Canadian CIE and General Tool Rental] markets and next year a little bit weaker,” added Hazelton. “The good news is we have seen growth. Even bringing in inflation, we’re going to have growth this year. It will be pretty close to flat next year with recovery coming in 2027 and 2028.”

Doug Dougherty, CEO, Cooper Equipment Rentals, added, “Generally speaking, it’s a softer market in Canada. We’ve seen utilisation rates pick up recently and so we are encouraged by that.

“For the second half of the year we see it pretty similar to 2024. We are optimistic that things in 2026 will be marginally better and we are already looking down the road to 2027 and 2028 to see the potential of real growth in the construction and economy here in Canada.”