ARA adjusts US rental forecasts but remains positive

The American Rental Association (ARA) continues to make bullish forecasts for the US rental market with 7.0% growth expected this year followed by increases of 9.2% next year and 12.9% in 2015.

The 7.0% figure is slightly lower than the 7.3% estimated by the association in May this year, reflecting a modest slowdown of the economy, but it remains an extremely high rate and in stark contrast to Europe where rental market growth this year is expected to be around 1%.

The ARA figures come from its quarterly Rental Market Monitor produced by consultant IHS Global Insight.

“The U.S. economy slowed more than expected in the first half of the year, but equipment rental demand has remained strong”, said Scott Hazelton, a senior partner with IHS Global insight, “We have lowered our growth expectations for 2013 modestly to reflect this, but rental growth will still handily outperform the overall economy.

“The path ahead still looks promising with employment growth continuing and housing data coming in strong, which implies an improving commercial construction market to follow. Industrial markets, especially those tied to energy exploration and production, also should see growth”.

US revenues will reach US$33.5 billion with year, a 7.0% increase, with growth reaching 7.8% in the fourth quarter.

In the US, the construction market and consumer spending continue to be the most important drivers of growth of the equipment rental market in 2013.

The construction and industrial equipment segment is forecast to grow 8.1% in 2013, while general tool segment revenue is expected to increase 5.4% over 2012. Party and event rental revenue is forecast to increase 2.4%.

In Canada, the equipment rental industry is forecast to generate nearly $4.6 billion in revenue in 2013, a 2.8% increase, and to continue growing throughout the forecast to reach nearly $5.4 billion in rental revenue in 2017.