Commercial Equipment Rental and Leasing NAICS 5324

Sep 4, 2025 - Commercial Equipment Rental and Leasing

• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and weaker margins, according to FMI’s third-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.8 compared to 52.2 in Q2 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. While about 52% of firms surveyed said their work backlogs had risen in Q3 2025 compared to a year earlier, only 25% expected backlog growth in Q4. While civil infrastructure firms expect backlogs to ease, margins remain under pressure from competitive bidding and higher costs. FMI expects firms to focus on project selection and cost controls to improve margins, as higher work volumes are a less reliable profitability boost. Infrastructure activity is a driver of equipment rental demand.
• The Equipment Leasing and Finance Association’s (ELFA) Monthly CapEx Finance Index (CFI) showed new business volume decreased 6.8% to $9.7 billion in July 2025 compared to the same month in 2024. On a month-over-month basis, new business volumes increased 1.7% in July. New business volume declined 3.8% in the first seven months of 2025 compared to the same period in 2024. ELFA CEO and President Leigh Lytle said, “The latest CapEx Finance Index data showed that conditions in the equipment finance industry continue to be steady, even as economic and financial volatility remains high. Equipment demand improved, and 2025 is on pace to be one of the best in the history of the CFI survey, despite some cooling from last year’s record amount of new business volume. Financial conditions remain healthy as credit approvals jumped, losses declined, and the delinquency rate remains stable. The survey took place before the latest round of tariffs was enacted in early August, so we’ll be monitoring the data closely for any signs of cooling demand or financial stress, but the sector remains well-positioned for the second half of 2025.”

• US manufacturing activity contracted in August 2025 for the sixth consecutive month, according to the Institute for Supply Management (ISM). In August, the ISM’s Purchasing Managers Index (PMI) rose to 48.7 from 48 in July but remained in contraction territory. A reading above 50% indicates manufacturing expansion. July’s New Orders Index decreased by 0.7 percentage points to 47.1%. The August Production Index rose 4.3 percentage points to 51.4%. Several respondents to the August ISM survey said their businesses faced tariff-related purchasing and supply chain challenges. Seven of the 18 manufacturing industries tracked by the ISM reported growth in August: textile mills; apparel, leather, and allied products; nonmetallic mineral products; food, beverage & tobacco products; petroleum and coal products; miscellaneous manufacturing; and primary metals. Industries reporting contractions in August included paper products; wood products; plastics and rubber products; transportation equipment; furniture and related products; machinery; electrical equipment, appliances, and components; computer and electronic products; chemical products; and fabricated metal products. US manufacturing activity is a demand driver for commercial equipment rental and leasing.
• Two major US equipment rental firms notched robust revenue growth in the second quarter 2025. United Rentals’ Q2 2025 revenue was $3.9 billion, up 4.5% over the same period in 2024. The company’s rental revenue rose 6.2% to $3.22 billion in the second quarter over $3.2 billion in Q2 2024. United Rentals revised its full-year revenue outlook to $15.8 billion to $16.1 billion compared to a previous projection of $15.6 billion to $16.1 billion. Herc Rentals’ revenue in the second quarter increased 18% to $1 billion compared to Q2 2023. The increase in year-over-year revenue was partly due to recent acquisitions, including H&E Rentals.