The latest information from the economic forecasting firm IHS Global Insight, prepared for the American Rental Association (ARA), reports that the equipment rental industry is starting to show signs of recovery from the national recession.
According to Christine Wehrman, CEO of the ARA: “The U.S. economy is proving its resilience with growth returning to many sectors. However, construction spending continues to lag behind the rest of the economy. While construction spending is weak, spending on rental is beginning to grow, and is leading the way in the construction space. We see the equipment rental industry gaining momentum in 2010 and 2011, with significant growth moving into 2012.”
The equipment rental industry is made up of three general market segments: construction and industrial equipment, general tool, and party and event. The construction and industrial market has been hit hardest by the recession, but economic indicators show that employment in the construction industry has increased significantly with the onset of the 2010 construction season. “This is a positive sign for the equipment rental market as cautious contractors will increase their equipment fleets through short-term and long-term rentals to keep employees productive,” says Wehrman.
The general tool market was not hit as hard, but did also decline as consumers postponed planned home improvements and do-it-yourself projects. New housing starts remain low, but residential construction has increased in the past year and is forecasted to continue its recovery as consumers become more willing to spend money.
Party and event equipment rentals have been the least influenced by the recession, experiencing only a modest decline in 2009. The consumer side of the business, including weddings, anniversaries, graduations and other celebrations are influenced by fashions and trends, and consumers expect rental service providers to have the latest equipment and amenities. “With the influx of capital into this market in 2010, and positive customer demand, the party and event market is poised to be a leader in our industry regarding the market’s recovery into 2011 and beyond,” says Wehrman.
For more information on ARA and the market forecasts, visit www.ARArental.org.