A report released by the American Rental Association (ARA) is forecasting steady annual growth through 2022 in equipment rental and event rental revenues in the United States. ARA also predicts that the rental industry will grow faster than the overall American economy. Anticipated growth rates for the next four years are:, For 2019 – 5.3%, For 2020 – 4.8%, For 2021 – 5.0%. For 2022 – 4.8%
The ARA stated that while these growth rates are down from its October 2018 Quarterly Forecast, it’s not due to a decline in the United States’ economy. ARA’s analysts attribute the slower growth to the ongoing trade war with China and the fading stimulus benefits from the tax cuts signed by President Trump in 2017.
That said, the outlook for the rental market is optimistic due to continued economic growth in the United States, which includes strong employment numbers and Purchasing Manager Indexes (PMIs) still in expansion territory. (PMIs are indicators of economic health for the manufacturing and service sectors. PMIs are based on a monthly survey sent to senior executives at more than 400 major companies that includes five major survey areas: new orders, inventory levels, production, supplier deliveries, and employment. Each of the categories is given equal weight.)
According to the ARA report, another contributing factor to growth in the rental industry is construction equipment fleet managers continue to be very disciplined about adding to their inventories.
By Suzanne Scheideker-Cook, Strategic Ventures