Five key trends shaping North America’s equipment rental sector

With the residential construction market cooling, persistently high interest rates and uncertainty over trade tariffs, equipment rental firms across the continent face a tougher year-end than expected.

Last week, the American Rental Association (ARA) trimmed its 2025 US growth forecast from 4.2% to 3.9%, while Canada’s projection slipped to 3.2% from 3.4%.

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

On Canada, Hazelton added: “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.”

1. Slowing residential construction

The cooling housing market is hitting rental companies hard. High borrowing costs and inflation have curtailed new home builds, traditionally a key driver of rental demand, prompting a shift towards industrial projects and infrastructure.

In June, Ashtead Group, owner of Sunbelt Rentals, posted a 5% drop in pre-tax profits, blaming “tough market conditions” and a slump in used equipment sales. Rental revenues still rose 4% to a record $9.9 billion, driven by specialty divisions and US expansion. The company expects “modest” growth of 0–4% in FY2026 and plans to almost halve capital expenditure.

United Rentals reported record Q2 rental revenue of $3.42 billion and raised its full-year forecast, but chief executive Matthew Flannery warned that high borrowing costs continue to weigh on the residential sector, while tariffs and trade tensions could push up equipment prices.

2. Policy-driven investment incentives

The “One Big Beautiful Bill” Act is offering rental and manufacturing firms a boost via full expensing for equipment purchases, higher interest deductibility and incentives for domestic production.

Tom Doyle, ARA vice-president of programme development, said OEMs were seeing more sales to the rental segment and expected that to continue into 2026. But Hazelton cautioned: “It does pull some spending forward, but the overall market is not growing that fast.”

3. Push for domestic production and infrastructure

Supply chain disruptions and geopolitical shifts are fuelling efforts to strengthen domestic markets. In Canada, that means breaking down interprovincial trade barriers and fast-tracking natural resource and infrastructure projects.

“What the government is doing right now is focusing on what they can control,” said Arlene Kish, global economic director at S&P Global. “They are talking about these large projects that can be pushed through in a shorter timeframe… so that we rely less on the US.”

4. Steady utilisation rates despite uncertainty

Even as growth forecasts soften, utilisation rates have held up. Cooper Equipment Rentals CEO Doug Dougherty said Canada’s rates had rebounded after a slow start, supporting optimism for the second half of 2025. Operators expect a similar performance to 2024, with gradual improvement in 2026 and stronger growth from 2027.

In the US, stable utilisation reflects demand in construction and industrial sectors, underscoring the importance of asset management and regional agility.

5. Construction and industrial rentals still core

Construction and industrial equipment will continue to dominate the US rental market in 2025, accounting for US$63.8 billion, compared with US$17.1 billion for general tools, according to the ARA. The split highlights how closely rental demand follows construction activity and infrastructure spending.