Canadian rental revenues forecast to reach $5.4B
According to the latest rental revenue forecasts from the American Rental Association (ARA), Canada’s rental revenues are projected to be $5.4 billion in 2018, up 4.4 per cent; and are expected to grow an additional 4.8 per cent in 2019; 4.7 per cent in 2020; 3.8 per cent in 2021 and 2.7 per cent in 2022 to reach $6.159 billion. Canada's construction and industrial segment is expected to make up $4.3 billion. Canada’s construction and industrial segment is expected to make up $4.3 billion of the $5.4 billion in 2018.
In the U.S., the ARA, for the second quarter in a row, is projecting larger increases in revenue almost across the board for the equipment and event rental industry than it did in the previous five-year forecast released in May.
The July 2018 forecast from ARA Rentalytics calls for total U.S. rental revenue of $53.04 billion in 2018, up 7.6 per cent, and then growing 5.8 per cent in 2019, 5.9 per cent in 2020, 5.1 percent in 2021 and 4.7 per cent in 2022 to reach $65.4 billion.
The May forecast called for total U.S. rental revenue of $52.3 billion in 2018 growing to $64.1 billion in 2022.
“ARA’s second quarter forecast shows continued strong growth in rental revenues over the forecast period. Growth rates for 2018 and 2019 look particularly strong in all segments of the equipment and event rental industry with growth rates forecast at more than double the rate of GDP [gross domestic product] growth,” says John McClelland, Ph.D., ARA’s vice-president, government affairs, and chief economist.
While the near-term outlook is particularly strong, McClelland said the out-years of the forecast could be subject to change due to the potential impact of tariffs on the economy and construction projects.
“Coupled with the increases in equipment prices that are almost inevitable after the imposition of tariffs on steel and aluminum, the equipment and event rental industry could face a challenging economic climate beginning in 2020 and beyond,” McClelland says.
According to ARA Rentalytics, construction and industrial equipment rentals continues to account for the bulk of revenue in equipment and event rental and now is expected to reach $37.15 billion in 2018, up 8.3 per cent over last year. General tool rental revenue in 2018 is forecast to be $12.49 billion, up 5.4 per cent. Party and event revenue is expected to reach $3.4 billion in 2018, up 8.8 per cent.
ARA also forecasts total investment in equipment by rental companies to reach $13.9 billion in 2018, up 7.8 per cent over 2017.
The American Rental Association, Moline, Ill., is an international trade association for owners of equipment rental businesses and the manufacturers and suppliers of construction/industrial, general tool and party/event rental equipment. ARA members, which include more than 10,000 rental businesses and more than 1,000 manufacturers and suppliers, are located in every U.S. state, every Canadian province and more than 30 countries worldwide. Founded in 1955, ARA is the source for information, advocacy, education, networking and marketplace opportunities for the equipment and event rental industry throughout the world. (www.ARArental.org)
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