Canadian Event and Equipment Rental Industry to perform better than previously expected
[Stoney Creek, Ontario] – The Canadian Rental Association has released its latest quarterly economic forecast for the Canadian Event and Equipment Rental industry. The forecast, covering the second quarter of 2023, reveals promising prospects for the equipment rental sector in Canada.
The forecast begins with an optimistic outlook for Canada’s real GDP growth for this year, which has been upgraded to 1.7% due to positive data and a more resilient US economy. However, for 2024, the growth forecast has been adjusted downward to 1.3%. The Bank of Canada recently raised the overnight policy rate to 5.00% to address labor market tightness and high inflation expectations. While Canada’s economy is performing well in the first quarter, leading indicators suggest a potential softening in the second quarter, impacting businesses’ activities. Consumer spending, net trade, and nonresidential construction remain the driving forces behind real GDP growth, with stronger population growth leading to an upward boost in the housing starts forecast.
Rental Market Summary:
In 2022, equipment rental revenue in Canada surged by 17.4% to reach $7.0 billion. The industry is poised to continue its growth trajectory in 2023, with rental revenue projected to rise by 6.7%. This upward revision from the Q1 2023 forecast is attributed to the rebounding economy as well as market size model improvements. The forecast model will now include more specialty markets within the construction and industrial equipment rental sector. Looking ahead, the equipment rental industry is expected to achieve a steady growth rate of 2.6-4.8% per year in the medium term, with a projected value of $8.7 billion by 2027.
The construction and industrial equipment rental sector saw robust expansion in 2022, with an estimated 14.9% increase in revenue to $5.4 billion. Market size model enhancements, encompassing specialty within the sector’s definition, contributed to this growth. Additionally, a strong first half in the construction markets, rising industrial production, and increased oil sands investments fueled expansion. In 2023, the segment is forecasted to grow further at 7.7%, with revenue expected to reach $6.9 billion by 2027.
General tool rental revenue soared by 16.4% in 2022, setting a new rental revenue record of $1.3 billion. While moderate growth in construction will result in slower expansion, revenue is still anticipated to rise by 3.0% in 2023. Nonresidential structures growth is expected to provide robust support, especially amidst the cooling housing market. By 2027, rental revenue in this segment will reach $1.5 billion.
Tent and event rental revenue finally returned to pre-pandemic levels in 2022, experiencing 102% growth. The re-opening of the economy contributed to the industry’s resurgence, although an economic slowdown may impact recovery rates. In 2023, the segment is expected to expand by 5.1%, followed by further growth in the 2024-2027 period. By 2027, tent and event revenue is projected to reach $398 million.
“The latest forecast highlights the resilience and growth potential of the Canadian Event and Equipment Rental industry,” said CRA CEO, Nathalie McGregor. “With the positive economic indicators and continued investments in the sector, we remain optimistic about the industry’s future.”
All CRA members have complimentary access to a quarterly summary update webinar, while detailed quarterly economic forecast data is available through a subscription service by contacting CRA at (905) 643-2333.
The Canadian Rental Association, based in Stoney Creek, ON, is the leading trade association for event and equipment rental businesses in Canada. CRA advocates on behalf of its members to government, regulators, and other stakeholders while providing industry insights, best practices, education, and networking opportunities.