Hire and Rental News - November 2015

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8 HIRE AND RENTAL NEWS • NOVEMBER 2015
INDUSTRY NEWS
The US industry also remains on track to
reach record revenue of $38.3 billion in
2015. The recently updated ARA Rental
Market Monitor five-year forecast remains
strong, despite slower demand for rental
equipment from the mining, oil and gas
sector, as commercial and residential
construction spending pick up steam this
year and are expected to grow faster over
the next few years, the ARA said.
According to Christine Wehrman, ARA’s
Executive Vice President and CEO, total
equipment rental revenue in 2015 for the
US is expected to grow 7.3% with growth
of 7.8% in 2016, 7.3% in 2017, 7.4% in 2018
and 6.5% in 2019 to $50.6 billion.
In Canada, equipment rental revenue
is forecast to increase 2.6% in 2015 to
reach $4.04 billion. The growth rate is
projected to increase 3.1% in 2016, 3.9%
in 2017, 6.4% in 2018 and 4.5% in 2019 to
reach $4.83 billion. For North America,
with the US and Canada combined, total
equipment rental revenue is forecast to
be $43.3 billion in 2015, up 6.8%, hitting
$56.6 billion in 2019.
“The equipment rental industry continues
on an upward trajectory and is expected
to show significantly strong growth
through 2019. Some specific market
conditions may change, but rental
companies are agile and can adapt their
inventory and fleet to fit what the market
demands,” Christine said.
“Customers continue to learn renting
equipment is a smart move, both
economically and environmentally,
leading to more organic growth for rental
companies,” Christine said.
The new quarterly ARA forecast from the
ARA Rental Market Monitor subscription
service has been modified slightly
compared to the first quarter’s forecast,
reflecting the rapid change in market
conditions, the economic dip related to
the harsh weather earlier this year and
the volatility in the energy markets.
US construction and industrial equipment
rental revenue is now expected to grow
7.6% in 2015, 7.9% in 2016, 7.7% in 2017,
Positive picture continues for US equipment
rental industry
The equipment rental industry revenue forecast for the
next five years continues to paint a very positive picture
for the future in the US, with growth rates exceeding 7%
through at least 2018, according to the latest projections
released by the American Rental Association (ARA).
7.8% in 2018 and 6.5% in 2019. US general
tool rental revenue is expected to grow
7.5% in 2015, 8.5% in 2016, 7.6% in 2017,
7.8% in 2018 and 7.8% in 2019.
US party and event rental revenue now
is projected to grow 4% in 2015 and 4.3%
in 2016, with growth slowing to 1.9% in
2017, 2.0% in 2018 and 1.8% in 2019.
While total rental revenue increased
3.8% in the first quarter, ARA estimates
revenue growth for the industry at 7.2%
in the second quarter, 8.4% in the third
quarter and 9.9% in the fourth quarter,
compared to the same periods in 2014.
IHS Economics, the economic forecasting
firm that compiles data and analysis for
the ARA Rental Market Monitor, said US
expansion is back on track as growth
resumed in the second quarter.
In addition, IHS Economics said
consumer spending is currently
supported by gains in employment, real
disposable income and asset values and
housing markets should steadily recover.
“In general, we are seeing positive
economic forces favoring the equipment
rental industry that outweigh any
negative market forces. That leads to
rental showing more confidence and
increasing investments,” Christine said.
Rental companies, according to the ARA
Rental Market Monitor, are forecast to
invest nearly $12.6 billion this year in
equipment, increasing to $13.5 billion in
2016 and $14.1 billion in 2017. Investment
is expected to be more than 32% for each
of the next three years.
Adverse weather and the slowdown
in oil and gas industry investment also
impacted Canada in the first quarter
of 2015. In Canada, construction and
industrial revenue is forecast to grow
2.5% in 2015, 3.1% in 2016, 3.9% in 2017,
6.8% in 2018 and 4.7% in 2019. General
tool’s growth rates for 2015–2019 in
Canada are projected to be 3.0%, 2.9%,
3.5%, 5.3% and 4.1% while party and
event’s growth is forecast for 3.5%, 3.9%,
4.6%, 3.5% and 2.4%.
Visit:
Redstar Equipment, which supplies
generators, compressors, welders,
lighting towers, distribution boards and
parts, was previously owned by Onsite
Rental Group.
The CFC Group has interests in
distribution, logistics, mining services,
property and infrastructure and owns
Cape Crushing and Earthmoving,
Centurion Transport, JCB Construction
Equipment Australia and Underground
Services Australia.
Kevin Ennis, who continues as General
Manager of Redstar Equipment said
being part of the CFC Group will enable
Redstar to access broader markets.
“This new ownership will allow Redstar
to expand its presence, building
opportunities for the business and
customers. Redstar already enjoys
strong market share on the western
and eastern seaboards, but under this
new ownership Redstar becomes a truly
national company,” Kevin said.
“Redstar will maintain its generator and
general equipment range plus continue
with its equipment services offering, but
now with more opportunity for growth.
“Thanks to the CFC Group’s national
service network, we will have even
wider exposure to crucial markets such
as mining and construction and our
customers will have access to services
CFC provides under that network, such
as additional national support and
technical advice,” Kevin said.
Redstar is the exclusive Australian
importer/distributor of Denyo diesel
generators and diesel welders and
the national distributor of Chicago
Pneumatic (CP) diesel compressors.
“At Redstar, we pride ourselves on the
level of technical knowledge we can
provide customers to assist in decisions
around size, set up and generator type
for the application use."
Contact: 07 3339 8512 or visit website:
CFC Group acquires
Redstar Equipment
CFC Group has added
Redstar Equipment, a
specialist fixed-speed
diesel equipment
business, to its portfolio
of industrial companies,
effective 1 October, 2015.