MOLINE, Ill.--(BUSINESS WIRE)--A slowdown in inventory accumulation and adverse weather limited first-quarter real gross domestic product (GDP) growth in the United States this year, but total equipment rental revenue growth in North America continued to more than triple the growth of the general economy with a 6 percent gain in the first quarter of 2014, according to the latest American Rental Association (ARA) forecast from the ARA Rental Market Monitor™. Economic data and analysis for ARA’s Rental Market Monitor is compiled by IHS Global Insight, one of the world’s most respected economic forecasting firms based in Lexington, Mass.
The forecast, updated April 29, projects total equipment rental revenue in North America to grow 7.5 percent in 2014 to reach $40.8 billion, 10.4 percent in 2015 to reach $45 billion and another 9.3 percent in 2016 to $49.2 billion. The growth rate is expected to be 7.7 percent in 2017 and 7.2 percent in 2018, with total revenue of $56.8 billion.
According to the ARA Rental Market Monitor, the general tool segment will have the highest compound annual growth rate (CAGR) at 10.2 percent over the five-year forecast and will increase its share of total rental revenue from 24.2 percent in 2013 to 25.7 percent by 2018.
Construction and industrial equipment revenue, driven by a stronger U.S. construction market, is forecast to see a CAGR of 8.6 percent between 2014 and 2018 in North America.
In the U.S. alone, total rental revenue in 2014 is forecast to reach $35.9 billion, up 7.7 percent, led by an 8.2 percent increase in construction and industrial rental revenue and a 7.3 percent increase in general tool revenue.
Both those segments are expected to hit double-digit growth in the U.S. in 2015 with construction and industrial revenue projected to increase 11.0 percent and general tool 13.2 percent, and again in 2016 with increases of 10.0 percent and 11.4 percent, respectively, with high single-digit growth expected in 2017 and 2018.
The party and event segment is expected to continue with the same steady growth it has shown over the past few years, with revenue increasing 4.4 percent in the U.S. in 2014 to reach $2.6 billion.
The forecast for Canada calls for 5.8 percent growth in 2014 to $4.9 billion, with growth of 6.0 percent in 2015, 5.3 percent in 2016, 3.5 percent in 2017 and 3.6 percent in 2018 to total $5.9 billion at the end of the latest forecast.
In order to grow revenues, it also is expected that rental companies in the U.S. will continue to invest more than 30 percent of its revenue in new equipment over the next five years. Total investment, according to the ARA Rental Market Monitor, is projected to reach $12.1 billion in 2014 and to grow to $14.3 billion in 2015, 15.9 billion in 2016, $15.8 billion in 2017 and $16.2 billion in 2018.
About ARA: (www.ARArental.org)
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 8,800 rental businesses and nearly 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, risk management, business development tools, education and training, networking and marketplace opportunities for the rental equipment industry throughout the world.
About IHS: (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to long-term, sustainable growth and employs more than 8,000 people in 31 countries around the world.
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