American Rental Association expects slight growth in 2023

According to the American Rental Association’s (ARA) latest forecast released in November, the equipment rental industry is expected to see single-digit increases over the next four years.

The forecast calls for equipment rental revenue — which includes the construction and industrial as well as the general tool segments — to increase by 3.4 percent in 2023 to nearly $57.7 billion after a growth of 11 percent in 2022 to reach almost $55.8 billion.

In subsequent years, equipment rental revenue is expected to grow 2.9 percent in 2024, 3.3 percent in 2025 and another 3.4 percent in 2026 to reach nearly $63.4 billion.

“In the current forecast we see a definite softening in rental revenue growth, but we do not see negative growth,” said John McClelland, Ph.D., ARA vice president for government affairs and chief economist.

The construction and industrial segment, according to S&P Global Market Intelligence, the forecasting firm that compiles data for the ARA forecast showed double-digit revenue increases in 2021 and 2022 at 10.2 and 12.7 percent respectively. The segment is forecast to show a 4 percent increase in 2023, 2 percent in 2024, and 3 percent in 2025 and 2026.

“There is variability in the forecast, depending on the end markets rental companies serve. However, nonresidential construction spending will be strong, and money continues to be spent from government stimulus programs, which both are positives for the rental industry,” said Tom Doyle, ARA vice president of association program development.

ARA reports revenue growth for general tools was a more moderate 4.5 percent in 2021 and 6.2 percent in 2022 and is forecast to be 1 percent in 2023, then 5 percent in 2024 and 2025 and 4 percent in 2026.

“In addition, the supply chain is improving, which can help alleviate the backlog of equipment orders, allowing equipment rental companies to expand inventory to meet demand, which adds to the positive outlook for the industry in 2023 and beyond,” Doyle said.