By Steve Noe
If you’re an avid OPE reader, you probably know by now that I absolutely love statistics, especially when it comes to this industry. So, I was thrilled to recently get my hands on statistical analysis by IHS Markit on behalf of two industry trade associations — the American Rental Association (ARA) and the Association of Equipment Manufacturers (AEM) — with regard to the equipment rental and equipment manufacturing industries, respectively.
Equipment rental industry: The ARA’s five-year forecast for equipment rental industry revenues, which was released in January 2017, shows a moderate strengthening compared to the November 2016 forecast. ARA now projects U.S. equipment rental revenue will reach $48.9 billion in 2017, but then grow at an average annual rate of 4.3 percent over the forecast to top $56 billion in 2020.
“We continue to see strength in key economic data that drive our rental revenue estimates,” said John McClelland, ARA vice president for government affairs and chief economist. “The economy continues to gain strength and the promise of tax reform, reductions in regulations, a more accommodative energy policy and additional infrastructure will only add to that strength. The big question continues to be how fast these changes will occur and go into effect.”
Construction and industrial equipment rental revenue is forecast to grow by 3.7 percent in 2017, 4.2 percent in 2018, 5 percent in 2019, and 4.2 percent in 2020. McClelland said revenues for the general tool segment are expected to grow even faster during the out years of the forecast due to the continued improvement in the U.S. housing market, with increases of 2.9 percent in 2017, 5.1 percent in 2018, 5.3 percent in 2019, and 6.6 percent in 2020.
Equipment manufacturing industry: AEM released a report at CONEXPO-CON/AGG 2017 March 7-11 in Las Vegas that found the equipment manufacturing industry supported approximately 1.3 million jobs and contributed more than $159 billion to the Gross Domestic Product (GDP) of the United States in 2016. The report detailed the size and reach of the three major sectors (Construction, Agriculture and Energy) that make up the core of the equipment manufacturing industry. Key findings of the report included:
* Equipment manufacturers supported more than 1.4 million jobs between the United States and Canada in 2016, through direct, indirect and induced employment effects.
* Equipment manufacturers supported more than $416 billion in sales activity in the United States in 2016, and added almost $159 billion to the GDP of the United States.
* In 2016, the equipment manufacturing industry’s top four states were Texas, Illinois, Wisconsin and Ohio.
* Equipment manufacturers generated more than $25 billion in local, state and federal tax revenue in the United States in 2016.
* Equipment manufacturers generated almost $87 billion in total U.S. labor income in 2016.
* The equipment manufacturing industry supported about 149,000 jobs in Canada in 2016, and contributed about $15 billion (USD) to the economy of Canada.
“AEM is proud to represent the men and women of the equipment manufacturing industry across our country,” said AEM President Dennis Slater. “This new report helps to put into context the many great contributions of our industry. Our industry is a core part of America’s manufacturing economy, and we are eager to continue to grow, and, hopefully with a significant investment in our infrastructure, help put millions of Americans to work.”
OPE Senior Editor Steve Noe