Scott Hazelton, managing director, IHS Economics, the economic forecasting firm that compiles data and analysis for the ARA Rental Market Monitor as part of a partnership with ARA and RENTAL MANAGEMENT, says economic growth in the first half in the United States has not been as strong as previously expected because of uncertain growth overseas and the increasing value of the dollar.
“This also has been acerbated by uncertainty surrounding future policy direction from a muddled presidential campaign season. However, construction remains strong, particularly in the residential sector, both new and home improvements. While nonresidential growth is slowing, we remain on track for another year of solid gains and consumer spending also remains strong. The slight adjustment in the forecast growth reflects the weaker view for U.S. energy and manufacturing, while the still strong growth reflects the fact that the economic and construction fundamentals remain positive,” Hazelton says.
The biggest change to the new forecast concerns Canada. Instead of projecting a decrease in total rental revenues in 2016 as it did in April, the ARA Rental Market Monitor now forecasts a 0.8 percent increase to $4.976 billion and total rental revenue in Canada is expected to grow at a compound annual growth rate of 4.2 percent over the 2016 to 2020 period.
While construction spending in Canada has been weak in 2016, resulting in the near flat equipment rental revenues, real residential and nonresidential construction are expected to rebound in 2017 and beyond, leading to a more positive forecast with equipment rental revenue in Canada expected to reach $5.859 billion in 2020.
About ARA: (www.ARArental.org) The American Rental Association, Moline, Ill., is an international trade association for owners of equipment rental businesses and the manufacturers and suppliers of construction/industrial, general tool and party/event rental equipment. ARA members, which include more than 9,700 rental businesses and nearly 1,000 manufacturers and suppliers, are located in every U.S. state, every Canadian province and more than 30 countries worldwide. Founded in 1955, ARA is the source for information, advocacy, risk management, business development tools, education and training, networking and marketplace opportunities for the equipment rental industry throughout the world.
About IHS Markit: (www.ihsmarkit.com) IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.
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