Commercial Equipment Rental and Leasing NAICS 5324

Jun 6, 2026 - Construction Spending Beats Estimate

• The total value of US construction put in place rose 0.4% in April 2026 compared to the prior month, according to the US Census Bureau. Residential spending grew 0.8%, and nonresidential spending increased 0.1%. Overall, construction spending in April surpassed economists' expectations of just 0.2% growth. A 1.4% increase in single-family project spending led April's growth, even as the conflict with Iran stoked inflation and sent the 30-year fixed mortgage rate higher. Spending on private nonresidential buildings declined 0.2% in April. Private nonresidential structure spending has fallen for nine consecutive quarters, despite the data center boom. Bright spots in April nonresidential building construction included a 1.9% rise in public safety project spending and a 1% increase in offices (a category that includes data centers). Lodging, educational, and healthcare also saw slight upticks. Infrastructure spending in April was led by conservation and development, power, and highway and street projects.
• US manufacturing activity expanded in May 2026, marking its highest level since May 2022, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in May rose to 54% from a reading of 52.7% in April. A reading above 50% indicates manufacturing expansion. May's New Orders Index increased by 2.7 percentage points to 56.8%. The May Production Index rose 0.9 percentage points to 54.3%. Of the 18 manufacturing industries tracked by the ISM, 16 reported growth in May: printing & related support activities; textile mills; nonmetallic mineral products; paper products; electrical equipment, appliances, and components; plastics & rubber products; primary metals; miscellaneous manufacturing; computer and electronic products; furniture and related products; machinery; transportation equipment; petroleum and coal products; chemical products; fabricated metal products; and food, beverage & tobacco products. Wood products manufacturing was the only industry to report a contraction in May. Manufacturing activity is a leading demand driver for commercial equipment rental and leasing.

• 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.