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
Feb 7, 2025 - United Rentals to Acquire H&E Equipment Services
- In January 2025, equipment rental firm United Rentals agreed to purchase H&E Equipment Services for $4.8 billion. United expects the deal to expand its offerings in more locations in the US. Some analysts suggest that H&E’s general rental equipment line – such as aerial work platforms, material handling equipment, and earthmoving equipment - complements United’s specialty equipment rental business. Demand for industrial equipment rental has increased amid steady government infrastructure spending and delivery delays by equipment manufacturers, according to Reuters. The acquisition of H&E would add about 64,000 equipment units to United Rental’s fleet.
- 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.
- On his first day in office, President Donald Trump signed an executive order to roll back several Biden-era climate initiatives, which could lead to repealing the $7,500 consumer tax credit for EV purchases, according to The New York Times. If the tax credits are removed, leasing an EV would also be more expensive, according to Bloomberg. The tax credits are offered through the Inflation Reduction Act (IRA), which requires qualified vehicles to be assembled in the US and have a defined percentage of battery parts and other components originating in the US. However, fleet owners – including car makers’ finance arms – are exempt from the IRA rule. Automakers can claim the $7,500 credit and pass the savings on to lease customers. The tax credit has made EV leases competitive with gasoline-powered vehicles. While removing the EV tax credits would require an act of Congress, Republicans control the House and Senate and may see removing the credit as a way to help offset Trump’s proposed tax cuts, according to NPR.
- US equipment rental revenue, which includes the construction/industrial and general tool market segments, is expected to rise in 2025 but at a slower pace, according to a recent forecast by the American Rental Association (ARA). After posting revenue of $78.2 billion in 2024, equipment rental revenue is expected to increase by 5.7% in 2025 and reach $82.6 billion. However, revenue growth is forecast to slow somewhat amid slower infrastructure and manufacturing spending as funding from the Infrastructure Investment and Jobs Act, the CHIPS Act, and the Inflation Reduction Act has peaked and begins to wind down. A bright spot is the general tool rental segment, which should see steady demand from improvements in the automotive and aerospace industries and gradual gains in housing, especially in the remodeling market.
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