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North America Construction Equipment Rental Market - Outlook and Forecast 2023-2029
The North America construction equipment rental market was valued at USD 42.64 billion in 2022 and is projected to reach USD 58.49 billion by 2029, with a compound annual growth rate (CAGR) of 4.62%. In 2021, the Biden-Harris administration signed the Bipartisan Infrastructure Law (BIL), which aimed to enhance the nation’s infrastructure and competitiveness by renovating roads, bridges, ports, airports, rail systems, and providing cleaner and more affordable energy. The construction industry received an investment of USD 1.8 billion in November 2022, while private construction received USD 1,426.4 billion during the same period. The implementation of the US Bipartisan Infrastructure Bill 2021 and Canada’s Affordable Housing Scheme is expected to drive the growth of the North America construction equipment rental market in the forecast period.
In November 2022, the Minister of Innovation, Science, and Industry in Canada announced a USD 127 million investment to support the renovation and expansion of eight biocontainment facilities across the country. Additionally, the government has allocated over USD 180 billion in grants under the Investing Canada Plan for public transit projects, green infrastructure, social infrastructure, and trade and transportation routes over a span of 12 years.
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USD 42.6 billion in 2021
Type, End User, and Region
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The Liberton Flat Redevelopment project involves the revitalization of commercial and residential areas, the construction of a new public library, a 28,000-seat stadium, and housing for 7,000 people. This project, which began in 2019 and will be completed in 2036, is expected to transform the face of Vancouver City and has a total cost of USD 4 billion. The Royalmount Project includes the redevelopment of the largest shopping mall covering 232,257 square meters. It will feature a performing arts space, water park, indoor and outdoor cinemas, resorts, hotels, an outdoor skating rink, and office space, with a total cost of USD 2 billion.
The development of a high-speed rail system in California will span 800 miles and include up to 24 stations, connecting San Francisco to Los Angeles and extending to Sacramento and San Diego. This project, estimated to be completed in 2033 at a cost of USD 68 billion, is the first high-speed train system implemented in the United States. The project receives federal investment of USD 2.6 billion from state bonds and approximately USD 7 billion from public-private partnership funding. The construction is carried out with environmental considerations, promising the recycling of 100% of usable concrete and steel. The transportation system will accommodate up to 1,300 passengers per train, with train technology based on high-speed trains from Japan, Germany, and France.
The Surrey-Langley SkyTrain project in British Columbia involves the extension of the Expo Line by 16 km primarily along Fraser Highway, from Surrey’s King George SkyTrain Station to 203 Street in Langley City. It includes eight stations and three transit exchanges. With an estimated completion date of 2028 and a total cost of USD 4.01 billion, the SkyTrain will improve transportation and provide greater access to opportunities and housing in the area.
Canada announced a program worth USD 964 million in 2022 to support smart renewable energy and grid modernization projects, focusing on clean energy technologies such as wind, solar, storage, hydro, geothermal, and tidal energy. Ongoing wind farm and solar projects in Quebec, Ontario, and Alberta are expected to drive demand for rental construction equipment due to its quick availability compared to purchasing new equipment.
The Portal Bridge Enhancement Project in New Jersey, with a total value of USD 1.65 billion, involves the construction of a 3.92 km, two-track, high-level, fixed-span railway bridge over the Hackensack River. This project, started in 2021 and estimated to be completed in the fourth quarter of 2026, will replace the existing 111-year-old swing bridge, facilitating smoother marine traffic and improving service along the northeast corridor.
The earthmoving segment, particularly excavators, accounted for the largest share in the North America construction equipment rental market in 2022. The Toronto Waterfront Redevelopment project is the largest urban redevelopment project in North America, encompassing commercial and residential development, including affordable housing. Parks, public spaces, and cultural facilities will be added to new communities. The Regal Plaza Corporate Centre project in Toronto, costing USD 130 million, involves the construction of a mixed-use business complex and an above-grade Staybridge Inn Hotel with two underground parking levels.
The construction of various infrastructure and residential projects in North America is expected to drive the demand for excavator rentals in the construction equipment rental market. For example, Tres Birds, an architect based in Denver, announced the development of the tallest mass timber building in 2022.
Intel announced plans to build two chip factories in Ohio with an investment of over USD 20 billion in 2021. Phase 1 of the project, scheduled to begin construction in 2022 and be completed by 2025, will create 3,000 Intel jobs and 7,000 construction jobs. General Motors Co. also plans to invest USD 7 billion in establishing four manufacturing factories in Michigan, leading to the creation of 4,000 new jobs.
In 2021, the manufacturing industry received investments worth USD 121.3 billion, with the largest share allocated to chemical manufacturing (USD 63.2 billion) and computers and electronic products. Real estate, rental, and leasing received USD 43.8 billion in investments. Greenfield investment amounted to USD 3.4 billion in 2021.
In November 2022, the Minister of Innovation, Science, and Industry in Canada made an announcement regarding a USD 127 million investment to support the renovation and expansion of 8 biocontainment facilities across the country. Additionally, as part of the Investing Canada Plan, the government committed to providing over USD 180 billion in grants for public transit projects, green infrastructure, social infrastructure, and trade and transportation routes over a span of 12 years.
Furthermore, Quebec revealed its plan to spend USD 75.6 billion in 2022 on infrastructure project renovation and maintenance. The education sector also pledged a USD 7.2 billion investment to expand and refurbish higher education institutions and increase classroom space. Moreover, Canada’s emphasis on the ‘Green Building Strategy’ has greatly boosted the demand for rental construction equipment in the country. This strategy aims to reduce emissions by 37% by 2030 and achieve a net-zero emissions building sector by 2050.
Regional supply disruptions have hindered the manufacturing of new equipment, leading to a surge in equipment prices and driving growth in the North America construction equipment rental market. The severe shortage of chips used in equipment manufacturing has further exacerbated the situation. It is projected that there will continue to be a shortage of semiconductor chips throughout 2023. For example, prices of new equipment such as skid steer loaders have increased by 30% in the region. The aerial platform and earthmoving segments have also experienced significant price increases in 2022 due to inflationary pressures. Prices of large excavators rose by 12% in 2022, with low sales. For instance, John Deere excavator prices rose by 18% in Canada.
Post-pandemic, the industry experienced higher growth in 2021, and the uncertainty caused by the pandemic benefited many rental companies. The unpredictable nature of construction activities encouraged small and medium-scale construction companies to rent equipment, leading to growth in the North America construction equipment rental market. The construction industry is expected to face increased uncertainty due to higher inflation in raw material prices, high unemployment rates, and high interest rates charged by construction companies. These factors will likely drive the adoption of rental construction equipment in the market.
In May 2022, the U.S. government introduced its Housing Supply Action Plan, which primarily focuses on reducing housing costs over time and promoting the development of affordable and quality housing across the country. The plan also aims to address the issue of high rental costs by constructing housing for low- and middle-income families. In 2022, approximately 1,392,300 residential units were completed in the U.S., representing a 3.8% increase compared to 2021. However, according to the U.S. Census Bureau’s report in December 2022, building permits totaled 1,330,000, which was 1.6% lower than in November 2022.
The Canadian government launched the National Housing Co-Investment Fund (NHCF) in 2018, committing USD 13.2 billion to construct 60,000 new housing units and upgrade 240,000 existing housing units by partnering with construction companies over a period of ten years.
The North America construction equipment rental market is focused on leveraging digital technologies to enhance the customer experience. For example, United Rentals has made significant investments in developing integration tools, digital platforms, and cloud-based worksite management solutions to improve productivity. Total Control, a cloud-based worksite management solution provided by United Rentals, helps customers maximize the utilization of their equipment fleet. The company also offers a mobile application that enables customers to rent equipment smoothly, track their fleet using GPS technology, browse the online equipment rental fleet portfolio, and request service and maintenance.
In 2022, the Canada Mortgage and Housing Corp. (CMHC) stated that approximately 3.5 million homes need to be built by 2030 to address the housing gap. In November 2022, single-family permits in Canada declined by 9%, and multi-family permits dropped by 2.6%. Additionally, residential construction in the U.S. reached its lowest point in 2022 due to high mortgage rates and elevated construction material prices. In October 2022, the average interest rate was 7.06%, and house prices increased by 40% compared to 2020, reaching USD 525,000. The Federal Reserve predicts that mortgage rates will reach 4.6% in 2023, higher than pre-pandemic levels.
According to Statistics Canada, the construction industry in the country faced a labor shortage of 81,500 workers as of Q1 2022. Many construction companies were forced to postpone or cancel their projects due to the lack of skilled workforce. For example, PCL Constructors Inc., a construction company, had to forgo various opportunities due to the unavailability of labor.
Furthermore, the Canadian Manufacturers and Exporters (CME) reported that the country’s economy suffered a loss of over USD 13 billion in 2021 due to labor and skill shortages in the manufacturing sector. Approximately 43% of companies delayed or canceled their projects, resulting in a loss of around USD 5.4 billion. According to the US Bureau of Labor Statistics, the construction industry in the US had approximately 440,000 job openings in April 2022. The investment outlined in the Infrastructure Bill of 2021 requires more than 300,000 laborers each year to achieve its goal of rebuilding infrastructure projects.
Both the U.S. and Canadian governments have committed to achieving net-zero emissions by 2050. The U.S. government’s focus on reducing air pollution has prompted them to implement necessary measures. The country is following the Tier 4 emission standard and is expected to introduce the Tier 5 emission standard by 2024. The construction industry in the region is a major contributor to CO2 emissions, and these regulations could dampen the demand for diesel-powered rental equipment in the North America construction equipment rental market. Additionally, as construction companies are encouraged to use compact and electric equipment on construction sites, the demand for large rental equipment in North America is also likely to decline.
The market is segmented based on various factors, including type, end user, and region.
Segmentation by Type
Earthmoving Equipment – Excavator, Backhoe Loaders, Motor Graders, 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
Segmentation by End Users
Logistics & Warehouse
Segmentation by Region
Government investments in the residential sector in Canada are projected to drive the demand for rental construction equipment in the country. Additionally, the growth of the E-commerce sector and investments in warehouse expansion will positively impact the logistics and warehouse sector in the United States. Consequently, there is an expected increase in the demand for rental forklifts and telehandlers in the US market throughout the forecast period.
In North America, the earthmoving rental equipment segment accounted for 49% of the total construction equipment rental market in 2022. This segment is estimated to reach $26,219.4 million by 2029, with a compound annual growth rate (CAGR) of 5.17%.
The construction industry is anticipated to experience significant growth due to government investments in affordable housing, railways, and road development projects. Furthermore, investments are planned for the development of airports and renewable energy projects. The application of rental construction equipment in the construction industry held a share of 55.1% of the overall market in 2022. It is expected to reach $27,849.9 million by 2029, growing at a CAGR of 5.03%.
The North America construction equipment rental market is predominantly led by prominent key players such as Caterpillar, Volvo Construction Equipment, Liebherr, Hitachi Construction Machinery, Komatsu, John Deere, Hyundai Construction Equipment, JCB, and Kobelco. These industry leaders have a strong market share and offer a diverse range of products in the North America construction equipment rental market.
In addition to these key players, other prominent vendors in the market include CNH Industrial, Liugong, Tadano, Terex, and JLG.
Caterpillar, Liebherr, Volvo Construction Equipment, Komatsu, and Hitachi Construction Machinery hold a significant position as industry leaders in the region. They not only have a strong market share but also provide a wide variety of products in the North America construction equipment rental market.
In May 2022, Caterpillar made an acquisition of Tangent Energy Solution, a Germany-based energy-as-a-Service (EaaS) company. This acquisition aims to reduce energy costs, increase energy efficiency, lower emissions, and enhance resiliency for customer operations.
JCB, John Deere, and Terex are emerging as strong contenders in the North America construction equipment rental market. These companies are introducing innovative products to capture a larger share of the construction equipment market. For example, in 2022, John Deere launched its new line of large wheeled loaders (744 P-tier, 824 P-tier, 844 P-tier, and 904 P-tier) in the United States.
Key Questions Answered
What is the size of the construction equipment rental market in North America?
The North America construction equipment rental market was valued at USD 42.64 billion in 2022 and is projected to reach USD 58.49 billion by 2029.
What is the growth rate of the construction equipment rental market in North America?
The construction equipment rental market in North America is expected to grow at a compound annual growth rate (CAGR) of 4.62% from 2022 to 2029.
Who are the key players in the construction equipment rental market in North America?
The key players in the construction equipment rental market in North America include Caterpillar, Komatsu, Hitachi Construction Machinery, Volvo Construction Equipment, Liebherr, SANY, Xuzhou Construction Machinery Group Co. Ltd. (XCMG), Hyundai Construction Machinery, John Deere, Kobelco, and JCB.
What are the key trends in the construction equipment rental market in North America?
The key trends in the construction equipment rental market in North America include the integration of digital technologies in the rental fleet by rental construction equipment companies and a focus on achieving net-zero emissions by 2050.
Which rental companies are prominent in the construction equipment rental market in North America?
Prominent rental companies in the construction equipment rental market in North America include 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, and Toromont Industries Ltd.