MOLINE, IL (May 11, 2015) - The equipment rental industry stands poised to set an industry record for revenues in 2015, according to the latest updated industry forecast from the American Rental Association (ARA), despite reduced demand for equipment in oil patch drilling sites.
Rental companies historically are able to adapt to changing market conditions, shifting inventory and moving equipment to where demand is greater, and today is no exception as lower oil prices are leading to greater consumer spending and fueling increased activity in construction as well as party and event market segments, offsetting the decline in opening new sites for drilling.
The new quarterly ARA forecast from its ARA Rental Market Monitor subscription service has been modified slightly from February and the numbers remain very positive with total revenue growth of 7.9 percent expected in 2015 to reach a record $38.5 billion in the U.S., including all three industry segments — construction/industrial, general tool and party and event.
ARA’s current five-year forecast calls for steady growth of 7.2 percent in 2016, 8 percent in 2017, 7.9 percent in 2018 and 6.8 percent in 2019 to reach $51.3 billion.
“Those in the rental industry have learned how to thrive in different economies and customers continue to learn that renting equipment is a smart move as market conditions today can change rapidly,” says Christine Wehrman, ARA’s executive vice president and CEO. “Even as several forces, including harsh weather, held back U.S. economic growth in gross domestic product (GDP) to 0.2 percent in the first quarter, total rental revenue was up 4.9 percent in the same time period and is expected to exceed 9 percent in the second half of the year."
Construction/industrial rental revenue is now forecast to increase 8.2 percent in 2015 to $25.9 billion, with general tool projected to grow 7.9 percent to $9.8 billion this year and party event to show a 4.7 percent increase to $2.7 billion.
The construction/industrial rental penetration also was up 100 basis points in 2014, from 52.9 percent in 2013 to 53.9 percent for 2014, according to the ARA Rental Penetration Index™. ARA released the 2014 ARA Rental Penetration Index in February at The Rental Show 2015 in New Orleans.
Sales into the rental channel by equipment manufacturers also continue to grow, meaning the penetration rate could climb higher this year. In addition, ARA is forecasting an increase of 8.3 percent in investment in equipment by rental companies this year.
For more information, visit the ARA Rental website.
