US Product Rental and Leasing Sector NAICS 532

May 6, 2026 - Major Equipment Rental Firms Post Steady First-Quarter Results

• Two leading players in the equipment rental industry posted solid Q1 2026 results, driven by strong year-over-year revenue growth. United Rentals reported total revenue up 7.2% to $4.0 billion, with rental revenue rising 8.7% to $3.4 billion, driven by higher rates, fleet expansion, and improved utilization. Net income increased 2.5% to $531 million despite some margin pressure. Having completed the integration of its H&E Equipment Services acquisition, Herc Rentals delivered stronger top-line gains, with total revenue jumping 32.3% to $1.1 billion and rental revenue up 32.7% to $981 million. Large construction projects and network expansion supported growth, though profitability declined as Herc's net loss widened to $24 million from $18 million a year earlier.
• North American engineering and construction spending in 2026 is expected to remain essentially flat (0% growth) after declining 1% in 2025, according to FMI’s second-quarter 2026 North American Engineering and Construction Outlook. Infrastructure and data center-driven office construction will lead growth, with office rising 6% (with data centers accounting for half of the growth), sewage and waste disposal increasing 8%, conservation and development up 6%, and power and water supply advancing 4% and 5%, respectively. Commercial construction spending is projected to decline 6% amid continued softness in retail and warehouse construction, while lodging is forecast to fall 4%. Healthcare and transportation construction are expected to increase 2%, while education remains flat, and segments including public safety and manufacturing post slight declines. Residential construction remains constrained by high mortgage rates and affordability pressures, with single-family spending declining 2% and multifamily down about 1% as elevated supply and uneven rent growth weigh on activity. Overall, 2026 reflects a fragmented market, with growth concentrated in infrastructure and data centers, while rate-sensitive private development remains weak.

• The Associated Builders and Contractors (ABC) Construction Backlog Indicator rose 0.5 months to 8.6 months in March 2026 compared to February. The infrastructure backlog increased by 1.2 months to 10.1 months in March, up from the previous month, while the heavy industrial backlog dropped by 1.1 months to 6.9 months over the same period. March’s commercial and institutional construction backlog rose 0.5 months to 8.8 months compared to February. The ABC’s Construction Confidence Index for sales fell to 64.7 in March from 65.8 in February. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, "Backlog has fully rebounded from January’s four-year low and, at 8.6 months, is now back to levels not seen since last summer. Contractors appear unfazed by the sharp rise in oil prices precipitated by the conflict in Iran." Construction backlogs are an indicator of future demand for equipment rental and leasing.
• The Equipment Leasing and Finance Association’s (ELFA) Monthly CapEx Finance Index (CFI) showed new business volume reached a value of $10.8 billion in March 2026, down 1.8% from the month before. On a year-over-year basis, new business volumes increased 12.5%. ELFA CEO and President Leigh Lytle said, " New business volume growth slowed modestly in March, but the industry just experienced its strongest quarter ever. The full economic impact of the conflict in the Middle East has not yet been felt in the data, so I wouldn’t be surprised to see some deterioration in demand heading into the summer. That said, financial conditions remain healthy, and I’m optimistic that our industry can weather the dual impact of higher prices and a changing of the guard at the Fed."