North America Construction Equipment Rental Market - Strategic Assessment & Forecast 2023-2029

The North America construction equipment rental market is expected to grow at a CAGR of 4.62%.

GOVERNMENT INVESTMENT IN PUBLIC INFRASTRUCTURE

• In November 2022, the Minister of Innovation, Science, and Industry in Canada announced an investment of USD 127 million to support the renovation and expansion of 8 biocontainment facilities across Canada. Additionally, under the Investing Canada Plan, the government stated more than USD 180 billion in grants for public transit projects, green infrastructure, social infrastructure, and trade and transportation routes over 12 years.
• The Liberton Flat Redevelopment project includes redeveloping the commercial and residential zones and will develop the new public library. It will also include a new stadium of 28,000 seats and a space for 7,000 people to live in the city. This project will change the face of Vancouver City; the construction started in 2019, will be completed in 2036, and will cost USD 4 billion. Royalmount Project includes the biggest shopping mall with 232,257 square meters will be redeveloped. The mega project will add a performing art space, water park, and indoor & outdoor cinema. The project will also house resorts, hotels, an outdoor skating rink, and office space inside the mega mall, costing USD 2 billion.
• Development of the high-speed rail system in California would include 800 miles of rail, with up to 24 stations. The project will connect San Francisco to Los Angeles, extending to Sacramento and San Diego. The rail would run along 1,287 km and is estimated to be completed in 2033. This project is the first high-speed train system implemented in the US. It is estimated to cost USD 68 billion, and the federal investment includes USD 2.6 billion in state bonds. Another investment of approximately USD 7 billion is by public-private partnership funding. The construction is being done in an environmentally friendly way, as it has promised to recycle 100% of all usable concrete and steel. The transportation system would include trains that accommodate 1,300 passengers at once and will be up to 1,300 feet long. The technology of the trains would be based on high-speed trains from Japan, Germany, and France.

KEY HIGHLIGHTS

• The earthmoving segment of the overall rental construction equipment accounted for the largest North America construction equipment rental market share in 2022. In the earthmoving segment, excavators accounted for the largest share in 2022.
• The Toronto Waterfront Redevelopment project is North America's largest urban redevelopment project. It is anticipated that approximately 5 million square feet of commercial development and 30,000 residential units, including affordable housing, will be built in the West Don Lands, East Bayfront, and Lower Don Lands neighborhoods, and much more across the wider designated waterfront area. The project will also include cultural facilities such as parks, public spaces, and amenities for new communities. Constriction of the Regal Plaza Corporate Centre includes USD 130 million, 35,650 square-foot mixed-use business complex located at 600 Dixon Road (at Martin Grove Road) in Toronto. The complex will also comprise an 11-story above-grade Staybridge Inn Hotel and a commercial center, with two new underground parking levels.
• The construction of various infrastructure and residential projects in North America is expected to drive the demand for renting excavators in the North America construction equipment rental market. For instance, the Denver-based architect, Tres Birds, announced the development of the tallest mass timber building in 2022.
• The Portal Bridge Enhancement Project, with a total value of USD 1.65 billion, involves constructing a 3.92 km, two-track, high-level, fixed-span railway bridge over the Hackensack River in New Jersey. The construction commenced in 2021 and is estimated to be completed in quarter four of 2026. The project would replace the 111-year-old swing bridge, enabling marine traffic to sail underneath smoothly, and will improve service throughout the northeast corridor. This will boost the demand for rental road construction machinery in the North America construction equipment rental market.

SEGMENTATION ANALYSIS

Segmentation by Type

• Earthmoving Equipment:
• Excavator
• Backhoe Loaders
• Wheeled Loaders
• Other Earthmoving Equipment (Other loaders, Bulldozers, Trenchers)
• Material Handling Equipment
• Crane
• Forklift & Telescopic Handlers
• Aerial Platforms (Articulated Boom Lifts, Telescopic Boom lifts, Scissor lifts)
• Road Construction Equipment
• Road Rollers
• Asphalt Pavers
• End Users
• Construction
• Mining
• Logistics & Warehouse
• Others

MARKET TRENDS & DRIVERS

Investment in the Upgradation and Maintenance of Infrastructure Projects Is Expected to Support the North America Construction Equipment Rental Market

In November 2022, the Minister of Innovation, Science, and Industry in Canada announced an investment of USD 127 million to support the renovation and expansion of 8 biocontainment facilities across Canada. Additionally, under the Investing Canada Plan, the government stated more than USD 180 billion in grants for public transit projects, green infrastructure, social infrastructure, and trade and transportation routes over 12 years.
Moreover, Quebec announced an expenditure of USD 75.6 billion in 2022 for the renovation and maintenance of infrastructure projects. The education sector has stated an investment of USD 7.2 billion to expand and refurbish higher education institutions and increase classroom space. Additionally, Canada’s focus on the ‘Green Building Strategy’ has significantly propelled the demand for rental construction equipment in the country. The Strategy aims to reduce emissions by 37% by 2030 and create a net-zero emissions building sector by 2050.

Tight Supply of New Construction Equipment and High Prices to Escalate the Demand for Rental Equipment

The regional supply disruptions have hampered the manufacturing of new equipment, leading to a surge in equipment prices and propelling the North America construction equipment rental market. The severe scarcity of chips used in equipment manufacturing has also added further pressure to the situation. Moreover, it has been estimated that semiconductor chips will remain in short supply during 2023. Prices of new equipment, for instance, skid steer loaders, increased by 30% in the region. Aerial platform and earthmoving segments also witnessed considerable price jumps in 2022 due to inflationary pressures. Prices of large excavators were up by 12% in 2022 with low sales; for instance, John Deere excavator prices rose by 18% in Canada.

The Boom in Residential Construction to Propel the Demand for Rental Construction Equipment

In May 2022, the U.S. government released its Housing Supply Action Plan, which primarily focused on reducing the burden of housing costs over time and boosting the development of affordable and quality housing across the US. The Plan would also aid the renters with high rental costs by constructing housing for low- and middle-income families. Approximately 1,392,300 residential units were finished in 2022 across the U.S., which was a 3.8% increase compared to 2021. According to the US Census Bureau report of December 2022, building permits were recorded at a total of 1,330,000 which was 1.6% below compared to November 2022.

Integration of Digital Technologies in the Rental Fleet by the Rental Construction Equipment Companies

The North America construction equipment rental market focuses on digital technologies to enhance the customer experience. For Instance, United Rentals has invested significantly in developing productivity-enhancing integration tools, digital platforms, and cloud-based worksite management solutions. Total Control, provided by United Rentals, is a cloud-based worksite management solution that supports customers in maximizing the utilization of their equipment fleet. The company also has a facility of Mobile Application through which customers can rent equipment smoothly, track their fleet through GPS technology, and browse the online equipment rental fleet portfolio with pricing. Customers can also place service and maintenance requests via the application.

INDUSTRY RESTRAINTS

A Rise in Mortgage Rates in the Region May Restrict the Demand for Residential Units

The Canada Mortgage and Housing Corp. (CMHC), in 2022, stated that approximately 3.5 million houses must be built by 2030 to tackle the housing gap. In Canada, in Nov 2022, single-family permits fell by 9%, and multi-family permits dropped by 2.6%. Additionally, residential construction in the U.S. fell to its lowest in 2022 due to high mortgage rates and high prices of construction materials. In October 2022, the average interest rate was 7.06%, and the house prices reached USD 525,000, a 40% increase compared to 2020. The Federal Reserve further predicted the mortgage rates to be at 4.6% in 2023, which is comparatively higher than the pre-pandemic levels.

Skilled Labour Shortage to Hamper the Delivery of Construction Projects

According to the data published by Statistics Canada, the country recorded 81,500 labor shortages in the construction industry as of Q1 2022. Many construction companies were forced to postpone and cancel their construction projects due to a shortage of skilled workforce. For Instance, PCL Constructors In. (Construction company) dismissed many opportunities due to the unavailability of the labor force.

Additionally, per the Canadian Manufacturers and Exporters (CME), the country’s

Environmental Regulations to Hamper the Demand for Large Rental Construction Equipment

The U.S. and Canadian governments, in 2021, committed to achieving net-zero emissions by 2050. The U.S. government’s concern for air pollution is driving it towards taking more necessary steps. The country is following the Tier 4 emission standard and is expected to launch the Tier 5 emission standard by 2024. The construction industry in the region is one of the largest contributors to CO2 emissions. Therefore, these regulations could hamper the demand for diesel-powered rental equipment in the North America construction equipment rental market. Demand for large rental equipment in North America would also decline as the construction companies are pushed to use compact and electric equipment on the constriction sites.

VENDOR LANDSCAPE

• The prominent key players in the North America construction equipment rental market include Caterpillar, Volvo Construction Equipment, Liebherr, Hitachi Construction Machinery, Komatsu, John Deere, Hyundai Construction Equipment, JCB & Kobelco.
• Other prominent vendors are CNH Industrial, Liugong, Tadano, Terex, and JLG.
• Liebherr, Caterpillar, Volvo Construction Equipment, Komatsu & Hitachi Construction Machinery are the industry leaders in the region. They have a strong market share, and these vendors offer diverse products in the North America construction equipment rental market.

Key Vendors

• Caterpillar
• Komatsu
• Hitachi Construction Machinery
• Volvo Construction Equipment
• Liebherr
• SANY
• Xuzhou Construction Machinery Group Co. Ltd. (XCMG)
• Hyundai Construction Machinery
• John Deere
• Kobelco
• JCB

Other Prominent Vendors

• Terex Corporation
• Liu Gong
• CNH Industrial
• Tadano
• JLG

Rental Companies Profile

• United Rentals, Inc.
• Sunbelt Rentals
• Herc Rentals
• The Home Depot Rental
• Warren CAT
• Sunstate Equipment
• H&E Equipment Services
• Maxim Crane
• Briggs Equipment
• Uperio Group
• Worldwide Machinery
• Cooper Equipment Rentals Ltd.
• NCSG
• Toromont Industries Ltd.

KEY QUESTIONS ANSWERED:

1. How big is the North America construction equipment rental market?
2. What is the growth rate of the North America construction equipment rental market?
3. Who are the key players in the North America construction equipment rental market?
4. What are the key trends in the North America construction equipment rental market?
5. Which are the prominent rental companies in the North America construction equipment rental market?