US Product Rental and Leasing Sector
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 51,175 product rental and leasing establishments in the US provide the use of commercial and consumer goods in return for lease or rental payments. Establishments may rent or lease nonfinancial intangible assets, including patents and trademarks (but excluding copyrighted works).
Seasonal, Uneven Demand and Cash Flow
Cash flow in the equipment rental/leasing sector is seasonal and driven by the dynamics of downstream industries.
Variability in Residual Value
Firms are exposed to financial risk when the market value of a vehicle or rental good is less than its depreciated value (residual value) when it is sold.
Industry size & Structure
The product rental and leasing services sector is comprised of 51,175 establishments that employ 585,900 workers and generate $210 billion in annual revenue, according to government sources.
- The product rental and leasing services sector represents 1.3% of the nation's Gross Domestic Product (GDP) and employs 0.4% of the country's workers.
- The sector is concentrated with the 20 largest firms representing 48% of revenue.
- In addition to employer establishments, the product rental and leasing services sector has 85,000 owner-operated establishments with no employees. Subsectors with the highest numbers of nonemployer establishments are commercial and industrial machinery and equipment rental and leasing (37%); automotive equipment rental and leasing (31%); and consumer goods rental (24%). The owners of nonemployer establishments typically perform the work and may outsource support functions like marketing and accounting.
- The product rental and leasing sector has shed about 4,100 establishments annually, which equals about 8.7% of existing establishments. However, the sector has added about 4,300 new establishments annually, which is equivalent to 8.4% of existing establishments. As a result, the sector has an average loss rate of 0.3%.
- The product rental and leasing sector is forecast to grow its employment base by 4.4% overall in 2023-2033, which is slightly higher than the national average of 4% for all jobs, according to the Bureau of Labor Statistics.
Industry Forecast
US Product Rental and Leasing Sector Industry Growth
Recent Developments
Mar 7, 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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