Due to the global health crisis, many industries faced incredibly trying times in 2020, and the equipment rental sector is not immune from this. With revenues down, many companies are turning towards experts to forecast the oncoming 2021 year in hopes of good news.
In February 2021, the ARA updated their forecast with an even more optimistic outlook.
Modest Short-Term Gains Point to Recovery
The ARA’s initial forecast pointed towards modest gains in the 2021 year, projecting growth of 0.3 percent.
As of mid-February, that projection has been revised show an expectation of more than 1.5 percent growth in 2021, surpassing $50.2 billion.
ARA vice president for government affairs and chief economist, John McClelland, Ph.D., credits government stimulus programs and vaccine rollouts with the increased confidence in the equipment rental industry to rebound after 2020’s losses.
“The equipment and event rental industry often recovers from adversity more quickly than the industries it serves, and it looks like this is happening again,” says McClelland.
Scott Hazelton, managing director of IHS Markit noted that “from an equipment rental perspective, construction did not slow as much as expected, although we do expect it to remain a drag in 2021.”
Accoring to Hazelton, “the larger surprise was the performance on manufacturing, which is also a source for equipment rental demand.”
Accelerated Growth Beyond
The ARA’s forecast indicated that beyond next year the growth would accelerate as recovery solidifies.
The new forecast is also increasingly optimistic about longer-term growth for the equipment rental industry. Whereas the ARA was originally expecting 9% growth through 2022, they now project 11.3% growth to $55.9 billion.
The growth isn’t expected to stop in the next 2 years, either. They project an additional 5% revenue increase to $58.7 billion in 2023 and another 3.1% to $60.5 billion in 2024.
Additionally, there is potential for all of these numbers to increase with the passage of additional COVID-19 economic relief bills.
Monitor Your Health in Rental360
Rental360, built in the Acumatica framework, offers equipment rental companies key tools needed to diagnose and monitor the health of their business. Foremost among them are real-time dashboards, offering key analytics and insights across all aspects of a business. These ARA certified dashboards offer deep drill-in capability to users, as well as customization and personalized views. In addition to financial and accounting data these dashboards also provide users industry-specific information such as equipment utilization.
By choosing Rental360 to power their systems, equipment rental companies arm themselves with the tools needed to act upon the positive forecasts for 2021 and beyond, fueling recovery and growth.
Originally posted November 17, 2021. Updated with more complete information.