Commercial Equipment Rental and Leasing
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,500 companies in the US rent or lease commercial or industrial equipment and machinery directly to businesses. Major categories for rental or leasing revenue include miscellaneous types of commercial or industrial equipment (manufacturing, medical, audio/visual, theatrical and motion picture, modular/mobile buildings, energy/power generating); construction, mining, and forestry equipment; transportation equipment; and office equipment. Firms may also sell new or used equipment, supplies, and parts.
Capital-Intensive Operations
The commercial equipment rental and leasing industry is capital-intensive, and firms typically have significant investment in fleet holdings.
Variable Equipment Market Value
Fluctuations in market value for rental or leased equipment affect a firm’s fleet management effectiveness because companies rely on the sale of used equipment as a source of revenue.
Industry size & Structure
The average commercial equipment rental company operates out of a single location, employs 23 workers, and generates nearly $10 million in annual revenue.
- The commercial equipment and machinery rental industry consists of about 8,500 firms that employ 193,000 workers and generate $82 billion annually.
- The construction, mining, and forestry sector accounts for about 37% of firms and 50% of industry revenue. The miscellaneous (manufacturing, medical, audio/visual, theatrical and motion picture, modular/mobile buildings, energy/power generating) sector accounts for 58% of firms and 46% of revenue. The office machinery and equipment sector accounts for 5% of firms and 4% of revenue.
- The industry is concentrated; the top 50 companies account for about 55% of industry revenue.
- Large companies include Aercap Group (commercial aircraft), United Rentals, and GATX. Large firms may have international operations.
Industry Forecast
Commercial Equipment Rental and Leasing Industry Growth
Recent Developments
Mar 3, 2025 - Farm Tractor Sales Decline
- Farm tractor sales – a demand indicator for farm equipment rental and leasing – dropped in January amid trade and agricultural legislation uncertainties, according to the Association of Equipment Manufacturers (AEM). US tractor sales declined 15.8% in January 2025 from a year earlier, led by a 54.5% drop in four-wheel drive tractor demand. Sales of 100+ horsepower (HP) tractors fell 26.8%, while 40-100 HP and <40 HP tractor sales were off by 16.3% and 11.3% respectively. Self-propelled combine sales plummeted 78.9% in January 2025 compared to the same month in 2024. AEM Senior Vice President Curt Blades said, “As we enter 2025, we’re seeing a continuation of slow sales saw throughout 2024. The Ag industry continues to face uncertainties including global trade concerns, tariffs, and the lack of assurance that a farm bill provides. These uncertainties are reflected in the softness of the ag equipment market.”
- US manufacturing activity expanded for the second consecutive month in February after posting 26 straight months of contractions, according to the Institute for Supply Management (ISM). Manufacturing activity is a demand indicator for equipment used in industrial production. The ISM’s Purchasing Managers Index (PMI) in February was 50.3, down slightly from January’s reading of 50.9. A reading above 50% indicates manufacturing expansion. February’s New Orders Index decreased by 6.5 percentage points to 48.6%. The February Production Index fell 1.8 percentage points to 50.7%. Of the 18 manufacturing industries tracked by the ISM, 10 reported growth in February: petroleum and coal products; miscellaneous manufacturing; primary metals; wood products; food, beverage & tobacco products; electrical equipment, appliances, and components; chemical products; plastics & rubber products; fabricated metal products; and transportation equipment. Industries reporting contractions in February included furniture and related products; textile mills; nonmetallic mineral products; computer and electronic products; and machinery.
- The Equipment Leasing and Finance Association’s (ELFA) Monthly CapEx Finance Index (CFI) showed that new business volume decreased by 6.4% to $9.3 billion in January 2025 compared to the same month in 2024. ELFA CEO and President Leigh Lytle said, “Global economic and political uncertainty remains elevated, which could weigh on equipment demand later this year as businesses decide to pause investment until tensions subside. As both aging receivables and charge-offs showed, the industry is well prepared for an extended period of uncertainty, or whatever else may be thrown its way in 2025.”
- Soon after taking office, President Trump issued an executive order called “Unleashing American Energy” that included an order to pause and review funding processes that some legal experts suggest will likely have ramifications for the Biden-era Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), according to Construction Dive. Many stakeholders found the order's wording unclear, prompting the Office of Management and Budget to issue a memo limiting the funding pause to programs the original order termed as part of the “Green New Deal.” Even with the clarifying memo, experts suggest the order could stop obligated funding for infrastructure projects that are already underway. The order is expected to face legal challenges. At the end of 2024, about $294 billion in funding authorized under the IIJA remained unspent.
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