Fourth Quarter Revenue Jumps 3 Percent Say Respondents to Baird/RER Equipment Rental Industry Survey

Revenue in the fourth quarter increased 3 percent year over year according to respondents to the fourth quarter Baird/RER Equipment Rental industry survey, an improvement compared to the previous several quarters. Thirty-two percent of respondents reported that the fourth quarter missed internal budgets, with 21 percent seeing better-than-expected results, and 47 percent saying results were in line with expectations. Expectations were net negative for the ninth straight quarter, but misses are becoming less common, especially for larger size operators. Baird said that after a challenging second half of 2024 and first half of 2025, a slow, gradual improvement could be catalyzed by lower rates and less policy uncertainty.

“Big jobs continue, but rates are challenging,” said one respondent. “Need the housing market to improve and drive smaller jobs.” 

“New markets for rental include solar panels, precast, construction, and water,” said another respondent. “Oil and gas pipeline work should be growing. Introduction of data centers should make things exciting.”

“The government shutdown impacted our business in a significant way during 4Q25, hoping now that the NDAA (National Defense Authorization Act) was signed into law, that business will pick up,” said another. Thirty-nine percent of respondents said business picked up during the fourth quarter, while 55 percent said business mostly stayed the same, and only 6 percent said business decreased during the quarter. Respondents expect the first quarter of 2026 to bring a 4.1 percent year-over-year increase, an improvement compared to the previous several quarters.

Respondents expect a 3.3-percent improvement in general rentals and 7.8 percent in specialty rental. 

“I personally do not feel very optimistic about the overall business environment for 2026, but I am starting to read a lot more encouraging news, as well as hear more positive outlooks from customers,” said one respondent. “Hopefully, some of the major issues causing economic headwinds will be sorted out in 1Q26.”

“Data center work is taking up larger chunks of the available rental fleet allowing my team to hold or slightly increase rental rates,” said another respondent.

“Activity is picking up – very weather dependent, even more than in previous seasons,” said another.”

“We are getting back to a normal market post-COVID,” said another. “We are seeing revenues returning to pre-COVID levels.”

A 5.3 Percent Jump in 2026

Survey respondents expect revenue to increase 5.3 percent year over year, while last quarter respondents expected a 4.6 percent revenue growth in 2026, with a 4.7 percent hike in general rentals and a 9.6 percent hike in specialty. Respondents expect 2026 rental rates to increase 2.3 percent year over year, compared to last quarter when respondents expected a 2-percent rate growth in 2026.

"Tariffs are a wild card,” said one respondent. “They hit the industry hard by big increased costs and extreme market uncertainty. Our forecasts are based on the hope that the tariff situation will stabilize and tariff relief will come for products generally not manufactured in the United States.”

“Backlog of jobs to start in 2026 is very promising,” added another respondent. “Business activity during the holidays is typically slow. We have seen an uptick in revenue between Christmas and New Year’s for 2025.” 

"Wait-and-see attitudes,” added a third. “Economy, finance rate changes, and tariffs supply chain options seem to be the most pressing issues at present. Interest rates have to go down for more construction startups.”

The number of units in fleets increased 1.4 percent year over year, similar to the previous several quarters. Respondents expect fleet spending to increase 2.4 percent year over year for the next six months. Last quarter, respondents expected a 2-percent fleet spending increase for the next six months. Respondents said the cost of new units increased 3.1 percent year over year, while the prior two quarters showed higher inflation compared to 2024 and the first half of 2025 because of tariff-induced price increases.

Fleet spending to rise in 2026

Respondents expect fleet spending to increase 3.3 percent year-over-year in 2026. Last quarter, respondents expect to increase fleet spending 2.8 percent in 2026.

"Looking to grow, but rate vs. cost is hurting profitability,” said one respondent.

“Consolidators continue to buy more and more fleet despite lower utilization,” claimed another. 

 “Competitors have downsized fleets modestly, and two competitors are no longer operating in the market,” said another.

“The Midwest is experiencing a softer-than-normal rental cycle primarily because of the soft ag market and long-term uncertainty. Residential construction is booming in our area,” added another. “We added a regional builder as a customer in October. There are no signs of a slowdown. Tariffs on new equipment are a problem. Hiring is still difficult. We have had four very strong months with revenue increases.”

And another respondent said, “Large projects moving forward, some small projects being put on hold. Price increases on all equipment and supplies in the 5 to 10 percent range.”