![American-Rental-Assoc-logo](https://www.mhwmag.com/cdn-cgi/image/width=800/wp-content/uploads/2018/11/American-Rental-Assoc-logo.png)
ARA’s US & Canada third-quarter economic forecast released
In its updated forecast, the American Rental Association (ARA) indicates that the United States equipment rental industry’s 2024 growth projection indicates softening. The most current projections indicate an 8.9% revenue increase in 2024, totaling $78.7 billion in construction and general tool rental revenue, and a 5.3% growth in 2025.
This is a decrease from last quarter’s projected 9.7% increase, totaling $79.2 billion. Broken down by segment, construction and industrial rental revenue (CIE) is projected to be $62.3 billion, and general tool rental revenue is expected to total $16.4 billion.
![Tom Doyle, ARA vice president, program development headshot](https://www.mhwmag.com/wp-content/uploads/2020/02/Tom-Doyle-ARA-vice-president-program-development.jpg)
Tom Doyle
“While the rental industry and opportunities continue to expand, we are experiencing softer growth,” states Tom Doyle, ARA vice president of program development. “The ARA quarterly survey results confirm this softening.”
![Scott Hazelton headshot](https://www.mhwmag.com/wp-content/uploads/2021/05/Scott-Hazelton.jpg)
Scott Hazelton
“The forecast for construction and industrial has not changed much since last quarter, perhaps a few tenths of basis points, but there has been more change to general tool,” says Scott Hazelton, managing director at S&P Global. “The market is still doing well but slowing. Next year’s GDP growth is lower than trend at 1.6% growth, the trend is around 2.1%. The overall view of rental is positive moving forward, but there is uncertainty out there.”
![Kurt Barney headshot](https://www.mhwmag.com/wp-content/uploads/2024/08/Kurt-Barney-president-of-Vandalia-Rental.jpg)
Kurt Barney
Kurt Barney, president of Vandalia Rental, Vandalia, Ohio, adds, “Largely what we’re seeing is softening growth as well. We’re seeing pricing elasticity. It’s no longer, ‘Do you have it?’ We’re back to doing business like 2019 when we have to really communicate the value proposition of working with us.”
Barney also says, “We’re balancing rate pressures, supply chain, and mix of the fleet in a softening environment, especially on the earthmoving side. As interest rates begin to decline, I think it will take some of the projects off the sidelines. The quarter and half points have a huge impact on those projects. The rental model and proposition has never been stronger. It’s a good place to be.”
The updated Canadian equipment rental revenue forecast shows a 6.6% growth, totaling $5.75 billion, compared to last quarter’s projection of 7.2% growth, totaling $5.79 billion. Broken down by segment, general tool and construction and industrial equipment (CIE) are expected to grow.
Canadian general tool revenue this year is projected to be 6.8%, $1.08 billion, and Canadian CIE revenue in 2024 is projected to be $4.67 billion.
![Rob Wilson headshot](https://www.mhwmag.com/wp-content/uploads/2024/08/Rob-Wilson-chief-operating-officer-of-Stephensons-Rental-Services.jpg)
Rob Wilson
Rob Wilson, chief operating officer of Stephenson’s Rental Services, Mississauga, Ontario, says, “What we’re seeing across our markets is pretty slow, but Stephenson’s is still growing. It’s a mixed bag. Residential activity represents 60% to 65% of those markets, and that activity is down.”
Wilson is optimistic that the latter half of 2025 will be very strong.
The 2025 projection for Canada’s combined rental revenue is $6.14 billion, a 6.7% year-over-year growth. Broken down by segment that equals $1.14 billion in general tool rental revenue and $5 billion in CIE rental revenue.
“I wouldn’t characterize Canada’s economy as robust, but CIE is one of the strongest investments in particular,” says Hazelton. “We do expect the economy to get stronger as a whole by 2027.”
What’s driving this forecast? S&P Global believes that interest rates will not come down until December, despite the chair of the Federal Reserve, Jerome Powell’s most recent testimony. Powell wants to see inflation stay under control before any moves are made. Hazelton also believes that when the cuts come, they will come slowly.
“We [S&P Global] also see a downshift in GDP from 2.4% growth this year to 1.6% growth next year,” says Hazelton.