The outlook for the equipment rental industry shows increased optimism as first-quarter performance was better than expected, resulting in a more positive outlook for the full year, according to the latest data released by the American Rental Association (ARA).

ARA now expects overall North American equipment rental industry revenue to increase at least 8.6% in 2012 to total $34.1 billion at year end, nearly 2 percentage points greater than forecast in February.

The projections are based on new figures updated quarterly by IHS Global Insight.

The forecasted rental revenue total includes the three segments of the industry — construction and industrial, general tool, and party and event — in the United States and Canada combined. The ARA Rental Market Monitor current five-year forecast calls for continued annual growth in rental revenue to reach a total of $53.2 billion by 2016 in North America.

“Our growth can be attributed to many things, but first and foremost, we are a solutions-based industry. We are seeing a fundamental shift as customers realize the value of renting versus the challenges of ownership,” says Christine Wehrman, ARA’s executive vice president and CEO.

“This trend was evident in the first quarter and those in the industry are focused on gaining further market penetration via new market segments and selling the value of equipment rental,” Wehrman says.

Investment in new equipment as a percentage of rental revenue also is on the rise and will reach 31.6% or $9.8 billion this year, according to IHS Global Insight, as equipment rental companies continue to rebuild, replenish and expand inventory to meet anticipated greater demand.