ARA projects steady rental growth in US

The American Rental Association has posted an unchanged forecast for the US construction and industrial rental market in 2026, with growth of 3.4% to US$83.5 billion. It has slightly increased its growth forecasts for 2027 and 2028 to 4.4% and 5.1%, respectively.

The quarterly forecast is created for ARA by S&P Global. Scott Hazelton, managing director at S&P, said the US rental industry remained resilient but was subject to headwinds such as higher energy prices and the impact of inflation on interest rate policy.

“One of the risks to the forecast is what is happening in the Middle East”, said Hazelton, “The war is not the problem for the US; the problem is the transmission of inflation through energy rates — both because of lower supply and because of the risk of transporting through the Strait of Hormuz.”

Image of a massive data center to be built at Pike County, Ohio. (Image: USA Today via Reuters Connect)

Hazelton said higher inflation could limit federal reserve policies on interest rates; “and in fact we’ve seen housing starts fail to move and most recently the numbers we saw for construction spend and home improvement spending was down too.”

The forecast for Canada is for the rental market to expand by 5.2% this year to US$6.3 billion, increasing to 5.4% in 2027 and 5.5% the following year. S&P said this growth was driven by infrastructure spending and oil field developments.

Tom Doyle, ARA vice president, program development, said; “The rental revenue increase indicates the preference for renting over ownership. The reasons are many for the growth, including the access to the equipment versus the asset ownership and the economics of renting.

“While rental revenue has increased, the results are mixed. If you have any of the large infrastructure projects or data centre buildouts, you’re in a stronger market with generally better results.”