Tags
Industry News

Canadian equipment rental revenue expected to reach $5.35 billion in 2018

ARA forecasts equipment rental industry to grow to nearly $60 billion by 2021

In its latest five-year forecast, the American Rental Association (ARA) expects equipment rental industry revenue to continue to grow consistently in the United States over the next five years, resulting in total revenue of $59.6 billion in 2021. According to the ARA Rental Market Monitor™ five-year forecast updated in February, total rental revenue in the U.S. is expected to grow by 4.5 percent in 2018 to reach $51.5 billion, 5.6 percent in 2019, 5 percent in 2020 and 4.4 percent in 2021. The February forecast is identical to the previous forecast released in November 2017 for 2018, with slight upticks in the expected revenue growth rates for 2019 through 2021.

In Canada, equipment rental revenue also is expected to show consistent growth, reaching $5.35 billion in 2018 with growth rates of 4.1 percent in 2019, 5 percent in 2020 and 4.7 percent in 2021 to total $6.125 billion, which is nearly identical to the November 2017 forecast.

Some of the positive expectations in the U.S. are a result of the Tax Cuts and Jobs Act taking effect in 2018.

"Our rental revenue forecast has increased somewhat in the out-years of the forecast. One significant reason for this increase is the long-term effects of the recently-passed tax cuts for both businesses and individuals," said John McClelland, ARA's vice president for government affairs and chief economist.

"Tax cuts generally provide fiscal stimulus to the economy, which can lead to more investment by businesses and higher employment. This can push wages higher, pushing up consumer spending on goods and services as well as leisure activities," McClelland said.

"All of these trends will help every segment of rental. The greatest concern we have is that of rising inflation that could result from an extremely tight labor market and rising prices for goods and services that are now part of the reflation of the global economy," he said.

"If inflation begins to move quickly to the upside, the Federal Reserve would be forced to tighten monetary policy with increases in interest rates beyond the 3.5 percent in our forecast. Currently, we believe this type of scenario would take some time to unfold, if it does at all, which is why we continue to expect increases in rental revenue throughout the forecast," McClelland said.

According to the ARA Rental Market Monitor, which features data and analysis from IHS Markit, a leading business information provider, construction/industrial equipment rental revenue in the U.S. is expected to show a 4.3 percent increase in 2018, 4.5 percent in 2019, 4 percent in 2020 and 3.4 percent in 2021 to reach $40.5 billion. General tool is expected to post increases of 4.7 percent in 2018, 5.9 percent in 2019, 7.8 percent in 2020 and 6.7 percent in 2021 to total $15.1 billion, while party and event is forecasted to show a 6.5 percent increase in 2018, 6.1 percent in 2019, 6 percent in 2020 and 5.6 percent in 2021 to reach $4 billion. "The tax cuts were widely anticipated with the election of President Trump and the structure of the cuts was largely what businesses had expected," said Scott Hazelton, managing director, IHS Markit.

"As such, economic responses to the cuts were already baked into the 2017 economic performance. IHS Markit only anticipates an additional 10 to 30 basis points of GDP [gross domestic product] growth compared to its pre-tax passage forecast for 2018-2020," Hazelton said.

"Even without the tax cuts, we anticipated rising interest rates would further slow construction market growth, and the potential for stronger inflation creates the risk of additional monetary tightening. The net effect is an equipment rental outlook close to what we had anticipated with modest enhancements to the upside," he said.

Investment in rental equipment by equipment rental companies is projected to increase by 3.1 percent in 2018, 8.8 percent in 2019, 3.2 percent in 2020 and 0.4 percent in 2021, surpassing $15 billion that year.

The share of revenue used for investment remains fairly steady at 25.9 percent in 2018, 26.6 percent in 2019, 26.2 percent in 2020 and 25.2 percent in 2021.

"A business and investment friendly climate suggests that the recovery can continue for some time yet and even accelerate modestly," Hazelton said.

"In 2019, we also expect a bump up in energy prices and an expectation of increased demand for equipment in the energy patch. That results in the expectation of a larger bump in investment in 2019, which also reflects the older fleet that will then be in use combined with expected future demand," he said.

"Once you get an 8 percent growth increase, you are at a new plateau," Hazelton said. "Absent another stimulus, you're not going to get another big bump in investment, so we expect that the investment increase will settle down again in 2020 and 2021."

ARA also released its latest ARA Rental Penetration Index, which shows penetration of construction equipment into the U.S. rental market at 53 percent in 2017, up 20 basis points versus last year after modest declines in 2015 and 2016.

The index calculates the percentage of construction equipment in use in the U.S. that is owned by rental companies.

Company Info

  • American Rental Association (ARA)

    1900 19th Street
    Moline , IL
    US , 61265-4179

    The American Rental Association, Moline, Ill., is an international trade association for owners of equipment rental businesses and the manufacturers and suppliers of construction/industrial, general tool and party/event rental equipment. ARA members, which include more than 10,000 rental businesses and more than 1,000 manufacturers and suppliers, are located in every U.S. state, every Canadian province and more than 30 countries worldwide. Founded in 1955, ARA is the source for information, advocacy, risk management, business development tools, education and training, networking and marketplace opportunities for the equipment rental industry throughout the world.

    Read more

Latest News

Tags
Industry News

Finning announces leadership changes in Canada and internationally

Kevin Parkes

Finning International Inc. announced that Juan Carlos Villegas, President of Finning Canada and Chief Operating Officer of Finning International, will retire on December 31, 2018 following a distinguished career with the company. Kevin Parkes, currently Managing Director of Finning UK and Ireland, will assume the role of President of Finning Canada.  Assuming the role of Managing Director of Finning UK and Ireland will be David Primrose, currently Finning Canada's Executive Vice President of Core Industries. Kevin and David will assume their positions on January 1, 2019 and will report to Finning International's President and Chief Executive Officer, Scott Thomson.

Read More

Tags
Industry News
Pipelines

NEB clears Trans mountain to start expansion project construction between Edmonton and Kamloops

NEB clears Trans mountain to start expansion project construction between Edmonton and Kamloops

The National Energy Board (NEB) has released a condition compliance Letter Report that gives Trans Mountain Pipeline ULC (Trans Mountain) NEB approval to start construction of its expansion project on Segments 1-4 (also referred to as Spreads), from the Edmonton Terminal to its Darfield Pump Station north of Kamloops in the B.C. Interior. 

Read More

Tags
Industry News
Pipelines

Line 3 Replacement growing the economy while protecting environment

Line 3 Replacement growing the economy while protecting environment

Canada is a place where the environment and the economy go hand in hand. Providing a stable, effective regulatory regime to approve and oversee pipeline operations is integral to safeguarding the environment, while supporting projects in the national interest that create good jobs, strengthen and grow the middle class and help get Canada's resources to world markets will deliver economic benefits for all Canadians. 

Read More

Tags
Industry News
Pipelines

Plains Midstream, SemCAMS hold open season for new Montney pipeline

Plains Midstream Canada ULC (PMC), a subsidiary of Plains All American Pipeline, L.P., and SemCAMS ULC (SemCAMS), a subsidiary of SemGroup Corporation, announced that they have received sufficient customer interest to conduct an open season and are soliciting further producer engagement for a new Montney to Market liquids pipeline to service production from the Wapiti and potentially the Pipestone area in West Central Alberta to PMC's terminal infrastructure in Edmonton and Fort Saskatchewan, AB.

Read More

Tags
Instrumentation, Systems & Automation

Tilt sensors designed for operation in hazardous environments

SignalFire Wireless Telemetry's Tilt Scout for angle measurement is now Class 1, Division 1 approved for operation in hazardous environments.  The latest member of the Scout family of Class 1, Division 1 integrated sensor nodes, the Tilt Scout combines an intrinsically safe wireless inclinometer with a 900mHz radio and antenna and an internal battery pack within a NEMA4X enclosure. The three-axis sensor detects the change in angle (movement) of an asset such as tank hatch position as part of a SignalFire Wireless Telemetry System. Designed for use in outdoor industrial applications, the Tilt Scout is also ideal for monitoring pump jack motion.

Read More

Tags
Instrumentation, Systems & Automation

Signal conditioner offers intuitive setup for LVDTs

Signal conditioner offers intuitive setup for LVDTs

NewTek Sensor Solutions introduces the NT-C-6000 Quik-Cal LVDT Signal Conditioner that offers an intuitive AC LVDT set-up for quick configuration by non-technical personnel. Workers can set zero and full scale output using front panel push buttons while LED indicators provide prompts for the calibration process. Color-coded plug-in screw terminals further simplify equipment set-up. These smart signal conditioners even self-diagnose and indicate LVDT failure while providing cybersecurity lockout and tamper detection.

Read More

Tags
Industry News

Ritchie Bros. shows strong second quarter results

Ritchie Bros. shows strong second quarter results

Ritchie Bros. Auctioneers Incorporated reported the following results for the three months ended June 30, 2018 (All figures are presented in U.S. dollars): Net income attributable to stockholders of $45.7 million improved 159% compared to $17.6 million for the same quarter in 2017. Diluted earnings per share ("EPS") attributable to stockholders increased 163% to $0.42 versus $0.16 in the second quarter of 2017, while diluted adjusted EPS attributable to stockholders1 (non-GAAP measure) increased 27% to $0.42 from $0.33 in the same respective period. 

Read More

Tags
Instrumentation, Systems & Automation

Bacharach introduces updates to PCA 400 combustion and emissions analyzer

Bacharach, Inc., a provider of HVAC-R gas instrumentation, combustion analysis and energy management solutions, announces key product upgrades to the PCA 400 combustion and emissions analyzer platform including sensor protection, Low NOx measurement, near-field communications (NFC) and the ability to connect/control the analyzer with the newly released mobile app.

Read More

Tags
Industry News

Cenovus to sell Pipestone business for $625 million

Cenovus to sell Pipestone business for $625 million

Cenovus Energy Inc. and one of its subsidiaries have entered into an agreement to sell the general partnership that holds the Pipestone and Wembley natural gas and liquids business in northwestern Alberta (the "Pipestone Business") for cash proceeds of $625 million. The transaction also includes the Pipestone Business's 39% operated working interest in the Wembley gas plant. The sale is expected to close in the third quarter of 2018, subject to customary closing conditions.

Read More

Tags
Industry News
Pipelines

NEB white paper addresses pipeline fittings

NEB white paper addresses pipeline fittings

The National Energy Board (NEB) has published its Recommendations to Improve Quality Assurance of Quenched and Tempered Fittings white paper. The report provides recommendations for enhanced quality assurance of integral components of Canada's transmission pipeline systems - quenched and tempered fittings. There are thousands of fittings (elbows, tees and reducers) on NEB-regulated pipeline systems, whose proper and traceable manufacturing, distribution and procurement helps ensure the safe operation of more than 73,000 km of pipeline currently under NEB jurisdiction. 

Read More

Chevrolet takes on towing with new Silverado 1500 features

The all-new 2019 Silverado 1500 will introduce four levels of towing features to provide customers more confidence, better visibility, easier hitching and improved connectivity between the truck and trailer.

The all-new 2019 Chevrolet Silverado 1500 will introduce several levels of towing features to improve customers' trailering experiences — all light-duty Silverado models have myChevrolet mobile app trailering capability and customers can add the Advanced Trailering System, which includes access to the system in-vehicle.

Read More

Tags
Industry News

Calima completes mergers in the Montney

Calima Energy Limited advises that following the successful completion of the takeovers of TSV Montney Ltd. and TMK Montney Ltd., the company will own a 100% working interest in 72,000 acres of drilling rights in British Columbia considered to be prospective for the Montney Formation. As a result, the Farm-in Agreement between the Company and TSVM and TMKM has become redundant and the agreement will be concluded.

As advised on 1 May 2018, the purpose of the takeover transaction was to consolidate ownership of the Montney Project, with the key benefits including, but not limited to:
  • Consolidation of a 100% interest in a single entity is likely to attract greater market interest;
  • The enhanced structure will likely provide improved access to capital to fund the forward work program and removes any risk associated with TSVM and/or TMKM funding its share of development costs;
  • Removes any potential impediments or misalignment of separate JV interests; and
  • Additional synergies include the removal of duplicated technical and administrative costs.

Read More

Tags
Industry News

Corporate responsibility report for 2017 released by Cenovus

Corporate responsibility report for 2017 released by Cenovus

Cenovus Energy Inc. has published its 2017 corporate responsibility report detailing the company's efforts to accelerate its environmental performance, protect the health and safety of its staff, invest in and engage with the communities where it operates and maintain the highest standards of corporate governance.

Highlights for 2017 included:
  • Achieving the company's lowest ever total recordable injury frequency (TRIF) of 0.36
  • Awarding 33 scholarships valued at $3,500 each for Aboriginal students pursuing a full-time degree, diploma or certified trade
  • Donating over $10 million to more than 1,000 local community organizations with a focus on supporting youth, strong families and safe communities
  • Raising nearly $1.5 million for more than 500 charitable organizations through our annual Thanks & Giving employee donation campaign
  • Spending $240 million doing business with local Aboriginal-owned companies or joint ventures and surpassing $2.4 billion in Aboriginal business spending since the company's launch in 2009  
  • Publishing Cenovus's Carbon Disclosure: Managing climate-related risks. The report features Cenovus's perspective on the transition to a lower-carbon future, carbon pricing and the ways that the company is managing and mitigating climate-related risks.   

Read More