ARA predicts Canadian rental revenue to grow by 7.2 per cent

parked skid steers with Coop equipment rental branding

The updated forecast for total Canadian equipment rental revenue projects 7.2 per cent growth this year, reaching a $5.79 billion total, according to the American Rental Association (ARA).

In its updated forecast, the ARA indicates the Canadian and United States equipment rental industry’s growth projection has increased since last quarter.

“The 2024 ARA forecast through the lens of our exclusive rental revenue model, and survey results gathered from members, confirms the continuation of a growing rental industry,” states Tom Doyle, ARA vice president program development.

Broken down by segment in Canada, general tool and construction and industrial equipment (CIE) are both expected to see growth.

Canadian general tool revenue this year is projected to be 6.8 per cent, reaching $1.08 billion, up from last quarter’s projection of $954 million. Canadian CIE revenue is projected to be $4.71 billion.

“Our experience mirrors what ARA is reporting. Despite headwinds in the residential market, revenues are up, with western Canada stronger than eastern Canada,” said Darryl Cooper, President of Cooper Equipment Rentals.

The United States equipment rental industry’s growth projection has also increased since last quarter. The most current projections indicate 9.7 per cent increase in 2024 totaling $79.2 billion in construction and general tool rental revenue. This is an increase from last quarter’s projection of a 7.9 per cent increase totalling $77.3 billion.

“There has been no serious bust, thus, there is no serious boom,” says Scott Hazelton, managing director at S&P Global. “The outlook remains steady and inflation is falling. The growth rates tail off in the future years, with growth of 3.8 per cent in 2025 and 3.1 per cent in 2026.”

General tool revenue in the United States is projected to increase 9.7 per cent this year to $16.6 billion and investment is expected to expand in 2024 and beyond. This year, investment in general tool is projected to increase 7.3 per cent with growth into 2025 at 7.9 per cent and into 2026 at 6.4 per cent.

“Our housing market is still being stubborn, so we see a 9.7% growth in 2024, an 8.8% increase in revenue growth in 2025,” Hazelton said. “Investment in general tool is higher than CIE, due to a faster replacement rate.”