2025 Economic Outlook Report
This report focuses on the major micro and macro-economic lead indicators for equipment rental, the possible impact of the election, and some of the highlighted trends in equipment pricing as we end 2024.
Two of the major lead indicators for equipment rental are Residential and Non-Residential construction. Both are forecasted for a mild rise in 2025 (ITR Advisor, November 2024) and are currently sitting at 5.5% and 9.5% above their respective year-ago levels (ITR Advisor, November 2024). As a lead indicator, this projects a strong need for construction and construction equipment well into 2025. However, beware that there is softness in the financing of the industry found in rising delinquency rates on commercial real estate loans and rising rental vacancy rates (ITR Advisor, November 2024).
Across the nation, Employment Rates are sitting at 1.5% above year-ago levels. Some regions are faring better than others; however.
“Regional trends are weaker than in past quarters as the labor market steadies, but stronger employment gains remain weighted toward states in the Mountain West and Southeast”
“As demographic shifts lead to an older workforce, ensure your business remains competitive in the labor market or look for potential labor-saving efficiencies.”
ITR Advisor, November 2024
Here are some key takeaways on the macro-scale:
RE: Spending Strategy - “Anticipated slightly more accommodative monetary policy, a still tight (though easing) labor market, and government spending all contribute to our expectation for reinvigorated inflation in late 2025. As such, 2025 will be an opportune time to make investments for your business, as this is a likely low point for borrowing costs for at least the next several years.” – The ITR Advisor, November 2024
RE: Market Outlook - “Most business owners should be prepared for growth next year despite ongoing uncertainty. Lower short-term interest rates may allow you to invest more effectively in efficiency improvements, and increased cash flow may allow you to rebuild a cash buffer or act on potential expansion opportunities. Continue to lead with confidence.” – The ITR Advisor, November 2024
RE: Industries on the Rise – “Annual US Private Data Center Construction in September totaled $25.7 billion and is accelerating in growth…Our clients with the right specializations within the construction and utilities sectors may benefit from the need to build out capacity.” – The ITR Advisor, November 2024
In addressing the impact of the election, the consensus sits in that it is too early to tell. Some points of interest to look out for are:
Tax policy reform, specifically regarding the Tax Cuts and Jobs Act (TCJA)
Corporate tax rate reductions for U.S. Manufacturers
As well as possible elimination of federal income taxes on tips, social security wages, and overtime wages
Raise in tariffs on Chinese, Mexican, and Canadian imports leading to increased price in imports or need for American substitutions
- MassMutual 2024 Post Election Analysis
Lastly, the October 2024 Highlights for Equipment:
Aerial products demonstrated stable results at auction and moderate declines at retail.
Telehandlers demonstrated stable results at auction and declines at retail.
Small and medium earthmoving demonstrated moderate declines at both auction and retail.
Heavy dozers and wheel loaders demonstrated moderate declines at both auction and retail.
- Rouse Analytics November 2024 Equipment Report
Hope this information is helpful as you begin to prepare for the new year! Feel free to reach out to my email ncrowley@peerexecutivegroups.com if you have any further questions.
Happy holidays,
Noah