The Construction/Industrial rental penetration is up 100 basis points in 2014 from 52.9% in 2013 to 53.9% for the most recent reporting year according to the American Rental Association (ARA) Rental Penetration Index™. ARA is releasing the 2014 ARA Rental Penetration Index at The Rental Show in New Orleans, La. “Rental penetration continues to increase in conjunction with strong growth in rental revenues in 2014,” says John McClelland, ARA vice president for government affairs and chief economist.

ARA’s Rental Penetration Index measures the proportion of the total fleet of construction machines that are owned by equipment rental companies. The index is value-based and uses original equipment cost as the primary weighting factor to calculate the ratio of rental equipment value to total fleet value. ARA and their research partner IHS Economics developed the ARA Rental Penetration Index to provide another measure of rental industry performance. The Index uses information from the U.S. Department of Commerce Current Industry Reports along with an aggregate estimate of the Financial Utilization metric provided by Rouse Analytics. “Using this information and the ARA/IHS estimates of rental revenue for the construction-industrial segment of the U.S. equipment rental industry allows IHS to consistently estimate rental penetration over time,” adds McClelland.

The 2014 ARA Rental Penetration Index marks the fifth straight year of growth since the dramatic dip in the index between 2008 and 2009. That dip was attributed to the nimble action equipment rental companies took when the financial crisis significantly reduced construction activities that drive equipment demand. Since 2009 rental penetration has continued to increase largely due to the growing demand for equipment in the construction-industrial segment coupled with tight credit conditions and the increasing costs of buying new Tier IV equipment that have made it difficult for contractors to rebuild their fleets after the financial crisis. “One of the biggest questions going forward is if the secular shift away from equipment ownership by end users toward rental continues,” says McClelland. “If 2014 is any gauge, there is still room for rental penetration to continue to increase and as the economy continues to grow this means more demand for rental equipment; a double-barreled boost to the equipment rental industry,” adds McClelland.

About ARA: (www.ARArental.org) 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 9,400 rental businesses and nearly 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.

About IHS (www.ihs.com) IHS (NYSE: IHS) is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 150 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2015 IHS Inc. All rights reserved.

ARATom Hubbell, 800-334-2177, Ext. 248; 309-277-4248tom.hubbell@ararental.org

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