North American rental growth to accelerate says ARA
By Murray Pollok04 November 2013
The American Rental Association (ARA) remains bullish on growth prospects for the North American rental industry through to 2017, although it has slightly reduced its estimated growth for 2014.
The association and its consultant, IHS Global Insight, forecast that growth in North American rental revenues will accelerate over the coming two years, reaching 8.4% next year and 11.3% in 2015 before levelling off in 2016 and 2017.
The results of the October update of ARA’s Rental Market Monitor study were issued by ARA in a press release.
Quoted in the release, Scott Hazelton, a senior partner at IHS Global Insight, said the US economy, after slowing down in the third quarter of this year, will pick up in 2014, led by house building. He added that the boom in the US energy sector would continue to have a beneficial impact on rental.
The slowdown in US GDP – now forecast to be around 1.5% this year – had a slight impact on revenues, with North American revenues now expected to reach US$38 billion this year, a 6.2% increase, and slightly lower than the 7.3% forecast by ARA in May. Even so, rental growth is exceeding GDP increases by a factor of four.
Christine Wehrman, ARA’s executive vice president and CEO, said; “The industry remains vibrant, strong and will benefit even more in the coming years due to non-residential growth, supplemented with residential construction growth and the strong influence of the energy boom in North America. We expect revenue in the U.S. to grow 8.4 percent in 2014 and 11.3 percent in 2015”.
ARA is also expecting investment by rental companies to grow in 2014, before a ”jump” in expenditure in 2015 to exceed $14 billion.