- The American Rental Association has predicted that U.S. rental equipment rental revenue will climb to $57.3 billion by 2020, according to Construction Equipment.
- The ARA expects revenue to increase by 4.9% to $47.6 billion in 2016 and by 4.6% to $49.8 billion in 2017, with a 4.6%-5% annual growth rate from 2016 to 2020.
- The ARA's forecast for 2016 and 2017 is a downward departure from its April forecast, but ARA Vice President and Chief Economist John McClelland said equipment rental growth is still doubling GDP growth.
The ARA revised its 2016 projections for Canadian rental revenue from a decline to a 0.8% increase, which brings forecasted revenue to almost $5 billion. The association expects the Canadian equipment rental industry to stage a comeback in 2017 and attain $5.8 billion in rental revenue by 2020.
Scott Hazelton, managing director of IHS Economics — the organization that compiles and analyzes data for the ARA — said that despite sluggish U.S. economic performance in the first half of 2016 and uncertainty due to the presidential campaign, the construction industry, particularly the residential sector, is still producing gains. He said a dip in the forecast compared to the ARA's April figures was helped along by the predicted softening of energy and manufacturing.
The strong equipment rental market has also given rise to innovation in that arena. Equipment marketplace platform EquipmentShare allows for peer-to-peer rentals and can track location and usage of both owned and rented equipment via sensors. Caterpillar-backed Yard Club is also a new player in the equipment rental market.
The equipment rental industry in the U.S. is faring much better than equipment giant Caterpillar's overall global outlook. The company said its U.S. business has been boosted by U.S. housing and infrastructure but added that American dealers are having to discount product to the point of almost no profit. The company is in the midst of executing its downsizing plan, but officials said those costs ($700 million) had zeroed out its cost savings. Caterpillar has committed to reducing its workforce by 10,000 and eliminating 20 facilities by the end of 2018, all a part of its $1.5 billion cost reduction strategy.