Continued rental growth
Updated American Rental Association economic forecast points to continued growth, but energy costs could be a drag on the economy.
In its latest quarterly economic forecast, the American Rental Association (ARA) indicates that the combined U.S. construction and industrial equipment (CIE) and general tool rental industry is projected to increase by 3.4 percent in 2026, totaling $83.5 billion, essentially unchanged from last quarter’s projection for the year.
Beyond 2026, growth in combined U.S. CIE and general tool rental revenue is projected to grow at a pace of 4.4 percent in 2027 and 5.1 percent in 2028 — slightly higher than the projections indicated in the previous quarter for these years.
“The latest ARA Rentalytics updates confirm the equipment rental structural changes toward rentals,” says Tom Doyle, ARA vice president, program development. “The rental revenue increase indicates the preference for renting over ownership. The reasons are many for the growth, including the access to the equipment vs. 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 center buildouts, you’re in a stronger market with generally better results.”
Scott Hazelton, managing director at S&P Global, the international forecasting firm that compiles data and analysis for the ARA forecast, said that while U.S. growth has remained resilient, certain headwinds exist that could impact the forecast.
“One of the risks to the forecast is what is happening in the Middle East. The war [with Iran] is not the problem for the U.S; 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,” Hazelton says, adding that the larger concern for the U.S. economy is the cost of the energy and its impact on inflation. “If inflation stays elevated through this year, that limits what the federal reserve can do with 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.”
At the same time, Hazelton says the risk to the forecast of inflation through oil prices as well as through tariffs “are relatively, right now, lower-risk outcomes. It’s unlikely we’ll see a major change in the Middle East to higher prices. In fact, we think, if anything, they’ll get lower as tensions cool somewhat. And the tariff picture — the Supreme Court has already ruled on what [the government] can and can’t do.”
In Canada, the combined CIE and general tool rental industry is forecast to grow 5.2 percent in 2026, totaling $6.3 billion. Like the U.S. forecast for this segment, this is essentially unchanged from the previous quarter’s projection for the year.
Beyond 2026, growth in combined Canadian CIE and general tool rental revenue is projected at 5.4 percent in 2027 and 5.5 percent in 2028. The accelerating growth projected for overall Canadian equipment rental revenue is attributed to increases in infrastructure spending and oilfield development.
Event rental segment
Also in its updated forecast, ARA shared that the U.S. event rental industry is forecast to grow 9.5 percent in 2026 to total $6.2 billion, an increase from last quarter’s projection of 8 percent growth to total $6.1 billion this year.
Beyond 2026, U.S. event rental revenue is projected to grow 8.3 percent and 6.4 percent in 2027 and 2028 respectively. The Canadian event rental industry is expected to grow 6.1 percent in 2026, totaling $280 million. Beyond 2026, growth in Canadian event rental revenue is projected at 7.4 percent and 5.6 percent in 2027 and 2028 respectively. “Event rental revenue accelerated in the U.S. and Canada, showing a solid increase over 2025. Those increases are forecast to continue in 2027,” Doyle says.
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