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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Jul 3, 2024 - Commercial Equipment Rental and Leasing
                                    • The total value of construction put in place decreased by 0.1% in May 2024 compared to the prior month, according to the US Census Bureau. Spending for nonresidential projects in May declined 0.1% from April, and residential spending fell by 0.2%. Within the nonresidential segment, spending growth was led by a 2.2% increase in sewage and waste disposal projects, followed by manufacturing (+1.3%), transportation (+0.9%), and communication (+0.7%). In commenting on May construction spending, Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said, “Nonresidential construction spending has fallen for two consecutive months yet remains just 0.2% below the all-time high achieved in March 2024. Much of that progress is attributable to ongoing infrastructure investments, which spurred a sizable 0.4% increase in publicly funded nonresidential spending in May.”
                                    • The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25) showed new business volume was up 11% to $10.2 billion in June 2024 compared to the same month in 2023. The MLFI-25 reports economic activity from 25 companies that represent a cross-section of the $1 trillion equipment finance sector. May’s business volume decreased 7% compared to April’s $11 billion. Year-to-date, business volume was up 6%.
                                    • Sunbelt Rentals, a division of UK-based equipment rental firm Ashtead Group, posted rental revenue of $8.3 billion for the fiscal year ending April 30, 2024, up 11% from fiscal 2023. For fiscal 2025, Sunbelt expects rental revenue growth of 4% to 7%. Sunbelt estimates that in 2024, it held an 11% share of the US equipment rental market, while Sunbelt competitor United Rentals held 15%. Sunbelt believes that two or three leading players will control about half of the US equipment rental market in the future.
                                    • US manufacturing activity contracted in June for the third consecutive month and for the 19th time in the last 20 months, according to the Institute for Supply Management (ISM). The ISM’s Purchasing Managers Index (PMI) in June dropped to 48.5% from a reading of 48.7% in May. A reading above 50% indicates manufacturing expansion. June’s New Orders Index decreased by 3.9 percentage points to 49.3%. The June Production Index fell 1.7 percentage points to 48.5%. Of the 18 manufacturing industries tracked by the ISM, only eight reported growth in June: printing & related support activities; petroleum and coal products; primary metals; furniture and related products; paper products; chemical products; miscellaneous manufacturing; and nonmetallic mineral products. Industries reporting contractions in June included textile mills; fabricated metal products; wood products; transportation equipment; plastics & rubber products; food, beverage & tobacco products; electrical equipment, appliances and components; and computer and electronic products. Manufacturing activity is a key demand driver for commercial equipment rental and leasing.
                                    Get A Demo

                                    Vertical IQ’s Industry Intelligence Platform

                                    See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                    Build valuable, lasting relationships by having smarter conversations -
                                    check out Vertical IQ today.

                                    Request A Demo