Canadian Event and Equipment Rental Industry Shows Resilience Amid Economic Challenges
Stoney Creek, Ontario [November 2, 2023] – The Canadian Rental Association (CRA) has released its quarterly economic forecast for the Canadian Event and Equipment Rental industry for Q3 2023. The forecast reveals that, despite temporary economic challenges, the industry is demonstrating remarkable resilience.
While the Canadian economy faces temporary headwinds, including natural disasters and labor strikes, these factors are viewed as short-lived obstacles. The anticipation of an eventual rebound, coupled with persistent inflationary pressures, is prompting the Bank of Canada to consider further monetary policy tightening. The bank’s goal is to maintain inflation around the 2% target, a commitment that comes in the wake of accelerating price increases for both consumer goods and wages. The economic forecast for Canada remains largely stable, with a projected expansion of 1.4% this year, 1.5% next year, and 1.6% in 2025.
The recent port strike along British Columbia’s coast had repercussions on manufacturing production, particularly in the chemical manufacturing sector. The strike affected manufacturing output, leading to losses in the nondurables manufacturing industry, as manufacturers adjusted production to address inventory concerns related to the strike.
The most concerning issue for the Bank of Canada is the feedback from manufacturers who continue to report price increases, which are being passed on to consumers. However, macroeconomic forecasts indicate that prices of raw materials and producer prices are expected to decrease due to downward pressure, mainly from energy prices.
Despite these challenges in the broader economy, the Canadian Event and Equipment Rental industry remains resilient. In 2023, equipment rental revenue is estimated to increase by 7.0% to reach $7.5 billion, thanks to the ongoing economic rebound. While the growth is expected to slow in 2024, the industry is forecasted to grow at a steady pace in the medium term, projecting an industry worth $8.6 billion by 2027.
The construction and industrial equipment rental sector is growing steadily, with revenue estimated to grow by 8.2% to reach $5.9 billion in 2023. The growth in this sector is attributed to a strong first half of the year in the construction markets, increased industrial production, and growing oil sands investments. In 2024, the segment is expected to experience slower expansion, but the long-term outlook remains positive and the sector is forecast to reach $6.8B by 2027.
General tool rental revenue is estimated to increase by 2.1% in 2023, setting a new high point in rental revenue of
$1.3B. Moderate growth in construction will yield lower growth rates in the coming years. Slow growth continues in
2024 with revenue dropping -3.4%. Nonresidential structures growth provides a bigger support than the residential
market as the housing market cools. By 2027 rental revenue in this segment will reach $1.4B.
Tent and event rental revenue is on the rise, with an estimated 5.9% increase in 2023. Although the economic slowdown may temper this growth, the industry is expected to expand further in the coming years. By 2027, tent and event revenue should reach $400M.
“Navigating a mixed economic landscape, our industry remains resilient in the face of temporary challenges,” says Nathalie McGregor, CEO of the Canadian Rental Association. “While we acknowledge the hurdles, our members are committed to seizing growth opportunities when they present themselves. Despite considerable headwinds the Canadian Event and Equipment Rental industry is well-positioned for the future.”
The CRA will continue to closely monitor economic developments, supporting its members as they navigate this evolving landscape. 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.