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Equipment Rental Industry’s CAPEX Rate to Rise 15% in 2012

August 14, 2012, 06:17 AM
Filed Under: Rental News

The forecast for the equipment rental industry remains bright according to the latest data released by the American Rental Association (ARA), despite a slowdown in overall economic growth in the second quarter of 2012.

ARA anticipates North American equipment rental industry revenue to increase by 8.2% in 2012 to reach $34.0 billion by year end. The growth is fueled by a strong revenue growth projection of 9% in the construction and industrial equipment segment to $22.7 billion and 8% in the general tool segment to $8.7 billion. The party and event segment is expected to grow 3.1% in 2012 to reach $2.6 billion in revenue.

The projections are based on the industry’s recently updated quarterly figures by IHS Global Insight, one of the world’s leading economic forecasting firms and a partner with ARA in providing data and analyses for the ARA Rental Market Monitor™ subscription service for association members.

Economic growth expectations are consistent with the prior quarter and remain bullish. The industry continues to outperform the U.S. economy at a rate more than four times that of GDP.

The ARA Rental Market Monitor current five-year forecast calls for steady, high single-digit growth in 2013 with double-digit revenue growth for the equipment rental industry in 2014, 2015 and 2016 to reach total North American rental revenue of $51.7 billion in 2016.

Also signaling a growth trend for the industry is the rate of investment in equipment, now projected by ARA to reach $9.85 billion in 2012, up more than 15% over 2011. This means investment in equipment as a percentage of sales is forecasted to be 31.7% this year. The percentage increase in equipment investment is expected to be even greater over the next three years.

“The equipment rental industry continues to be a leader in recovery of our economy. The growth rate we’re seeing over 2011 is substantial, further demonstrating the significant value proposition that renting equipment has to offer,” says Christine Wehrman, ARA’s executive vice president and CEO.
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 8,500 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 rental equipment industry throughout the world.

IHS is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. 

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