The equipment and event rental industry in North America is expected to finish the year with total revenue up 5.35% to $61.56 billion, the first time combined rental revenue for Canada and the United States has surpassed $60 billion, according to the latest forecast released by the American Rental Association (ARA).
The latest updated figures show rental revenue in the U.S. forecasted to be $56.02 billion in 2019 with Canada generating $5.54 billion in revenue from rentals of construction and industrial, general tool, and party and event equipment.
The five-year forecast calls for continued growth for U.S. rental revenue through at least 2023, reaching $64.1 billion that year, and for Canada to reach $6.35 billion.
Although the outlook calls for slightly slower growth rates than the previous quarterly forecast in August, the industry continues to outpace the general economy in the U.S. where gross domestic product (GDP) growth slowed from a 3.1% annual growth rate in the first quarter to 2% percent in the second quarter. The third quarter GDP growth estimate is 1.9%.
According to IHS Markit, the forecasting firm that compiles data for ARA and its ARA Rentalytics subscription service, new tariffs on U.S.-China trade flows and diminishing fiscal stimulus could contribute to a slowdown in annual real GDP growth from 2.3% in 2019 to 2% in 2020 and 2021, and 1.7% in 2022.
According to ARA, construction equipment rental in the U.S. is forecast to grow 5.2% in 2019, with growth rates of 2.3% in 2020, 3.0% in 2021, 3.7% in 2022 and 3.1% in 2023 to reach $43.9 billion.
The growth rates for general tool include 6.8% in 2019, 3.8% in 2020, 3.96% in 2021, 5.2% in 2022 and 2.9% in 2023 to reach $15.7 billion.
Investment in equipment by rental companies in the U.S. is expected to remain relatively flat each year with small declines in spending in 2020 and 2021, followed by slight increases in 2022 and 2023 to reach $14.55 billion.
In Canada, equipment and event rental revenue is expected to increase 2.4% in 2019 to reach $5.54 billion, with growth of 3.4% in 2020, 4.6% in 2021, 3.2% in 2022 and 2.7% in 2023 to reach $6.36 billion.