The equipment rental industry revenue forecast for the next five years continues to paint a very positive picture for the future in the United States, with growth rates exceeding 7 percent through at least 2018, according to the latest projections released by the American Rental Association (ARA). The U.S. 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 have started to pick up steam this year and are expected to grow faster over the next few years.

Overall, total equipment rental revenue in 2015 for the U.S. is expected to grow 7.3 percent with growth of 7.8 percent in 2016, 7.3 percent in 2017, 7.4 percent in 2018 and 6.5 percent in 2019 to reach $50.6 billion.

In Canada, equipment rental revenue is forecast to increase 2.6 percent in 2015 to reach $4.04 billion. The growth rate is projected to increase 3.1 percent in 2016, 3.9 percent in 2017, 6.4 percent in 2018 and 4.5 percent in 2019 to reach $4.83 billion.

For North America, with the U.S. and Canada combined, total equipment rental revenue is forecast to be $43.3 billion in 2015, up 6.8 percent, reaching $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,” says Christine Wehrman, ARA’s executive vice president and CEO.

“Customers from large construction companies to contractors, homeowners, corporate event planners and families celebrating milestones likes weddings and graduations also continue to learn that renting equipment is a smart move, both economically and environmentally, leading to more organic growth for rental companies,” Wehrman says.

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.

U.S. construction and industrial equipment rental revenue, according to the forecast, is now expected to grow 7.6 percent in 2015, 7.9 percent in 2016, 7.7 percent in 2017, 7.8 percent in 2018 and 6.5 percent in 2019.

U.S. general tool rental revenue now is expected to grow 7.5 percent in 2015, 8.5 percent in 2016, 7.6 percent in 2017, 7.8 percent in 2018 and 7.8 percent in 2019.

U.S. party and event rental revenue now is projected to grow 4 percent in 2015 and 4.3 percent in 2016, with growth slowing to 1.9 percent in 2017, 2.0 percent in 2018 and 1.8 percent in 2019.

While total rental revenue increased 3.8 percent in the first quarter, ARA estimates revenue growth for the industry at 7.2 percent in the second quarter, 8.4 percent in the third quarter and 9.9 percent in the fourth quarter, compared to the same time periods in 2014.

IHS Economics, the respected economic forecasting firm that compiles data and analysis for the ARA Rental Market Monitor, said U.S. expansion is back on track as growth resumed in the second quarter, led by a pickup in consumer spending, but tempered by a slowing in inventory investment.

In addition, IHS Economics said consumer spending is currently support by gains in employment, real disposable income and asset values, and that housing markets should steadily recover in response to rising employment, easing credit standards and pent-up demand.

“In general, we are seeing positive economic forces favoring the equipment rental industry that outweigh any negative market forces. That leads to rental companies showing more confidence and increasing investments in fleets that will support the growth of the industry,” Wehrman says.

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 as a share of revenue is expected to be more than 32 percent 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 as the country’s gross domestic product (GDP) declined at a 0.6 percent annual rate. Lower oil prices are particularly impacting Alberta, Saskatchewan and Newfoundland while Ontario and Quebec are benefitting from gains in consumer purchasing power and export competitiveness.

In addition, the Bank of Canada lowered its policy rate to 0.5 percent in mid-July to help revive economic growth.

As a result in Canada, construction and industrial revenue is forecast to grow 2.5 percent in 2015, 3.1 percent in 2016, 3.9 percent in 2017, 6.8 percent in 2018 and 4.7 percent in 2019. General tool’s growth rates over for 2015-2019 in Canada are projected to be 3.0 percent, 2.9 percent, 3.5 percent, 5.3 percent and 4.1 percent while party and event’s growth is forecast for 3.5 percent, 3.9 percent, 4.6 percent, 3.5 percent and 2.4 percent.