ARA Releases Its Latest U.S. and Canada Economic Forecast
Need some good news? The U.S. and Canadian equipment rental industries continued to grow in 2024. In its recently updated forecast, the American Rental Association (ARA) shared that the U.S. construction and general tool rental industry finished 2024 as an $83.3 billion industry, an 8 percent growth from 2023. The industry is also projected to grow 5.2 percent in 2025, totaling $87.5 billion.
However, the ARA expects growth to slow to 4.1 percent and 4 percent in 2026 and 2027, respectively. The association says that slowed growth corresponds with projected moderated investment in both the construction and general tool industries in the coming years.
From the press release:
“Economic uncertainty and relatively high financing costs, underscored by today’s Fed decision, weigh on the outlook for investment,” says Scott Hazelton, managing director at S&P Global, the international forecasting firm that compiles data and analysis for the ARA forecast. “However, this is little risk of a serious downturn, and equipment rental can gain penetration in uncertain times. Our equipment rental outlook for 2025 has been lowered from our view last quarter, however, we still project equipment rental growth at about twice the rate of real GDP and inflation.”
Another notable takeaway from the forecast was that as businesses chose rental over ownership, the construction and industrial equipment (CIE) rental penetration rate increased for the fourth year in a row. It increased to 57 percent in 2024, which was higher than the pre-pandemic peak.
In Canada, the ARA says the industry rounded out 2024 with $5.73 billion in revenue, a 6.1 percent growth over 2023. According to the ARA’s forecast, the Canadian construction and general tool rental industry is projected to total $5.95 billion, a 3.7 percent growth. Unlike the U.S., the Canadian rental industry is projected to grow 7.2 percent and 6.7 percent in 2026 and 2027.
“Equipment rental penetration hit a record in the past quarter as rental customers continue to accept the solutions provided by rental companies,” says Tom Doyle, ARA vice president, program development. “For 2025, while the forecast calls for growth in the equipment segment, that growth softens. Our quarterly ARA member surveys confirmed they expect growth in Q1 of 2025.”
In its press release, the ARA also shared industry contributions to key economic metrics. For example, the equipment rental industry directly, indirectly or induced supplies 666,000 jobs in the U.S. The association noted that the industry provides $47.4 billion in wages and contributes $115 billion in GDP, directly and indirectly.
Pam Kleineke is managing editor of Compact Equipment.
