Blog / Equipment Rental Trends: State of the North American Industry

Equipment Rental Trends: State of the North American Industry

The global pandemic has had a major impact on the equipment rental and event industry. While 2020 was a challenging year for everyone, rental companies are starting to see signs of recovery and improvement as COVID-19 restrictions lift. After recently attending a rental analytics webinar from the American Rental Association (ARA), we learned a lot about what’s going on in the industry right now in the United States and Canada. We’ve outlined some key takeaways from the event, including equipment rental industry trends and what to expect in 2021 and beyond.  

Expect Moderate Growth in Equipment Rental Revenue This Year 

The ARA is the largest equipment rental membership organization in the world devoted to advancing the equipment and even rental community. Through education, member surveys, and research reports, they provide valuable insight into the latest rental market trends and data to help companies remain competitive. They have also been the driving force behind the ARA Trade Show for the past few years. 

We recently attended an informative webinar hosted by ARA Rentalytics, a subscription service available to ARA members that provides exclusive market intelligence for the equipment and event rental industry. Attendees of the webinar included a variety of stakeholders from rental companies, vendors, and manufacturers across North America.

In November last year, the ARA forecasted modest overall growth in 2021 in the United States equipment rental market, up by 0.3 percent. Although this is an improvement to 2020, it still shows a 13 percent decline in rental revenue this year compared to 2019. In Canada, total rental revenue for 2020 is expected to come in at nearly $4.7 billion, down 15.2 percent compared to last year, before growing 7.3 percent in 2021. 

The good news is, it’s only going up from here. The equipment rental industry in North America will continue its recovery, accelerating with growth of 9.2 percent in the U.S. (8.3 percent in Canada) in 2022. Following a similar trajectory is equipment spending. Investment in equipment was hard hit in 2020, with a 43 percent decrease, but is expected to rebound in 2021 by 17.4 percent and continue growing into 2022. 

During the webinar, attendees were asked questions to assess their own performance and how it aligns with these industry forecasts. When asked to predict their company’s performance this year compared to last year, 87% said it would be the same or slightly better, 68.5% felt it would improve, and 13% said it would be worse than 2020.  The numbers forecasted by the ARA show us how hard the coronavirus pandemic hit the equipment rental industry. 

Key Takeaways from the ARA Rentalytics Webinar

If you’re not a member of the ARA, we recommend joining. This webinar was an excellent opportunity to learn about what’s happening in the North American equipment rental market and connect with other rental organizations. Here are some of the highlights to consider this year:    

  1. Total US equipment rental revenue dipped in 2020, will stay lower in 2021, and is predicted to match 2019 levels in 2022, eventually increasing in 2023.  
  2. Total Canadian equipment rental revenue is improving slower than the US but follows a similar pattern of stagnation and growth. 
  3. In the US Construction & Industrial Equipment industry, 2022 will match 2019 with the overall growth trend resuming in 2023.  
    During this part of the webinar, there were some other notable mentions to consider over the next few years. Construction & Industrial Equipment saw a 50% decrease in investment in equipment in 2020 but will be restored to a 24% increase in 2021. And 2022 will see 41% growth in rental investment.
  4. 2020 saw a dip in rental penetration but is expected to bounce back quickly in the next 2 years.
    Rental penetration represents the percentage of equipment held by equipment rental companies versus total equipment owned by rental and contractors. Rental companies are generally quicker to adjust their rental fleets compared to contractors, which is why you see the dips as rental companies liquidate some of their equipment. The ARA forecasts a continuing trend of contractors choosing to rent equipment versus buying. As equipment is matched to projects, equipment rental is charged back to customers, and maintenance and equipment risk is passed to the rental companies. 
  5. Industrial equipment capital spending is predicted to increase significantly during 2021 depending on COVID-19 cases declining and business confidence returning.
  6. Recovery in 2021 will be turbocharged because of the stimulus on equipment rental revenue.

Top Technology Trends in the Rental Industry 

The common theme throughout this webinar is that recovery in the equipment rental and event industry will be a multi-year process. Although nothing happens overnight, there are ways to start making improvements to your rental operations today. Technological advancements in the industry are changing how rental companies manage their operations, customer service, and industry compliance. 

To help you understand what those rental technologies are and the impact they can have on business growth, our experts have summarized several relevant technology trends in our latest eBook. Download this eBook to learn about 14 of the top emerging technologies affecting the systems rental businesses lean on and stay on top of your game during this recovery.