ARA’s quarterly forecast reveals optimism in rental operator attitudes

The American Rental Association (ARA) said its latest report indicates the U.S. equipment rental industry’s growth will soften this year. Last quarter, ARA said it expected year-over-year growth to be 4.7 percent in 2023 and 2.1 percent in 2024. ARA’s most current projections indicate 7.6 percent growth in 2023 totaling $60.4 billion in construction and general tool rental revenue. As for 2024, members expect a 3.1 percent revenue increase.

“After talking with many manufacturers and operators at ConExpo-CON/AGG and in the weeks after, it’s clear the headwinds are still there,” said Tom Doyle, ARA vice president of program development. “Inflation is still high, interest rates are still high and they may continue to rise, while issues remain with labor shortages and supply.”

However, ARA said investment in the construction industry and construction employment approaches a record high.

“Interestingly enough, the last couple quarters we’ve seen synchronicity from the top down (S&P Global) and bottom-up (quarterly member survey) data, including projections and sentiments,” Mike Savely, ARA director of program development said. “They’re both showing growth. Our members are benefitting from getting both the top-level economic picture and results of our internal surveys.”

Last quarter, ARA asked its members about the current situation of equipment rental and 18 percent of respondents believed the situation was getting better. This quarter, 32 percent of respondents indicated a more positive outlook with 86 percent of respondents reflecting a generally positive sentiment.

As for the second quarter, ARA asked members if they expect a revenue change compared to the same quarter last year. Results show that 76 percent of respondents believe revenue will increase compared to the second quarter of 2022.