Stoney Creek, ON., November 16, 2021
According to the latest Canadian Rental Association (CRA) forecast, event and equipment rental revenue in Canada is projected to increase 12.0% in 2021 to $5.5B, an upward revision from Q2-2021. This quarterly forecast focuses entirely on the event and equipment rental market in Canada, and provides the most complete look into the general tool, construction and industrial equipment, and tent and event rental segments of the Canadian market.
The latest forecast, compiled by IHS Markit on behalf of CRA, shows the industry will grow 8.9% in 2022, surpassing the pre-pandemic peak of $5.6B in 2019, before returning to 2-3% annual growth in the longer term. By 2025 the Canadian equipment rental industry should surpass $6.4B.
Part of the reason behind higher forecast growth rates and perhaps one of the biggest issues affecting all sectors is rising price levels. Near-term inflation pressures are building given that some commodity prices continue to climb, like oil, natural gas, and shipping costs. Consumer prices are expected to rise above 4% year over year in the last two quarters of 2021 and 3.2% year over year in the first quarter of next year. Inflation is forecast to subside in 2022 and beyond, gradually declining to 2% by 2023. Unfortunately, there are more upside risks to the inflation outlook than downside factors.
Canada is well entrenched in the pandemic’s fourth wave, Nathalie MacGregor, CEO of the Canadian Rental Association says “the forecast shows that the pandemic remains the biggest domestic headwind. Yet global supply-chain delivery delays are having a large impact on the Canadian economy, in terms of production, trade, and consumption.”
The construction and industrial equipment rental sector will grow by 10.8% in 2021 to $4.2B. The growth is supported by improving industrial production, rising oil sands investments and improvement in the construction sector. Growth above 7% in 2022 will allow the sector to surpass the 2019 pre-pandemic revenue peak and rental revenue in this sector will exceed $4.8B by 2025.
General tool rental revenue will increase by 13.9% in 2021, wiping out the 8.3% decline seen in 2020 to set a new high point in rental revenue of $1.1B. Significant growth in residential construction reflecting the booming housing market will help drive rental revenue in this sector. The forecast also shows that by 2025 rental revenue in this segment will reach $1.3B.
Tent and event rental revenue was profoundly impacted by the pandemic, with 2020 revenue falling 64%. As the country begins reopening, revenue for this sector is expected to increase 33% in 2021 and 92% in 2022. A slight downward revision of the forecast reflects the impact of the Delta variant on the reopening of the economy. The 2022 revenue of $294M will still be 8% below the pre-pandemic levels of 2019, however by 2025, tent and even revenue should recover to reach $332M.
