The American Rental Association (ARA) is forecasting a 13 percent decline in equipment and event rental revenue this year compared to 2019, dropping to $48.7 billion in the United States.
However, the latest forecast released by the association calls for modest overall growth in 2021, ticking up 0.3 percent to $48.9 billion, before accelerating recovery kicks in with growth of 9.2 percent in 2022, 6.8 percent in 2023 and 4.8 percent in 2024 to reach $59.7 billion.
The party and event segment is forecast to show the largest drop in 2020 revenue, down 38.9 percent to $2.2 billion. After so many rental stores saw business virtually disappear in the spring and early summer of 2020, the results set the stage for what will look like very favorable comparisons in 2021.
For example, the ARA forecast calls for party and event rental revenue to grow by 36.4 percent in 2021 to reach $3 billion, but this recovery falls far short of making up for the 2020 decline. The segment, according to the forecast, is not expected to reach peak 2019 revenue levels again until 2024.
Construction and industrial rental revenue also is forecast to finish 2020 with a significant hit in revenue, dropping 13.3 percent to $33.8 billion and a 3.3 percent decline is forecast for 2021 before double-digit growth of 11.2 percent comes in 2022.
The general tool segment weathered the coronavirus (COVID-19) pandemic the best and is expected to finish 2020 down 5.2 percent to $12.7 billion and is expected to top its 2019 revenue peak by 2022.
“The forecast shows us how hard the coronavirus pandemic hit the equipment and event rental industry. Hopefully 2021 will see us getting back some of the revenue losses we experienced in the equipment and general tool segments. However, the event segment continues to have a steep hill to climb and we will be working hard to bring more relief to that segment through government stimulus programs,” said John McClelland, ARA Vice President for Government Affairs and Chief Economist.
Investment in equipment is significantly down in 2020, with a 43 percent decrease to $8.166 billion. Equipment spending is forecast to rebound by 17.4 percent in 2021 and by 46.3 percent in 2022 to surpass annual investment of $14 billion.
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, 8.3 percent in 2022 and 6.8 percent in 2023 to $5.83 billion, exceeding the industry 2019 peak of $5.54 billion.
The party and event segment in Canada is expected to have the largest drop in revenue in 2020, down 28.5 percent to $172 million, but is forecast to bounce back in 2021 with 23.7 percent revenue growth and then surpass its peak 2019 revenue by 2023.
Construction and industrial rental revenue in Canada is expected to show a decrease of 15 percent in 2020 to $3.768 billion, but then grow 7 percent in 2021 and 9.1 percent in 2022 and 7.4 percent in 2023.
General tool rental revenue in Canada is forecast to decline by 12.76 percent in 2020 with revenue expected to show an increase of 5.1 percent in 2021 and 4.9 percent in 2022.