Revenue in the second quarter increased 7.9 percent year over year for the respondents to the Baird/RER rental equipment industry survey, the best growth numbers in the past 12 quarters. General rental revenue increased 6.8 percent on a revenue-weighted basis and 4.7 percent on an equal-weighted basis. Specialty rental revenue increased 13.1 percent on a revenue-weighted basis, and 9.6-percent on an equal-weighted basis.

Thirty-nine percent of respondents reported that the second quarter beat internal budgets, with 18 percent seeing worse-than-expected results and 43 percent said results were essentially in line with their expectations. With expectations a net positive of 21 percent for the second straight quarter after nine quarters of the opposite, results are exceeding expectations, particularly for larger-sized operators.

Baird’s take is seeing a clear, gradual improvement in activity as data center investments are having a ripple effect broadening growth and investment, which could be further catalyzed by lower rates/less policy uncertainty and an end to the war in Iran. But these are huge “ifs.”

“The impact of data centers, electrical built-out, and an uptick in oil & gas activity are having a positive impact on our markets,” said one respondent.

“Specialty rental continues to grow at a faster pace than general rentals,” said another. “Even as the rental industry has struggled in general over the last two to three years, whether due to geopolitics or the economy, specialty rentals has grown double digits.”

“Activity across a number of markets has increased – oil and gas, water, precast construction,” said another. 

However, a fourth commenter cautioned that the improvement is not at all levels, saying “more opportunities for bigger rental companies than the industry is benefiting in general.”

Another positive for respondents is the average rental rate being 1.2-percent higher year over year. Rental rates have been gradually softening over the past several years, following a peak of a 4.8-percent increase in the third quarter of 2022 as lower utilization and excess equipment supply has brought a downward pressure on rental rates. This quarter brought a modest reversal of this downward trend, although anecdotal commentary still points to a strongly competitive environment. 

“Pricing pressures are continuing to cause margin erosion,” cautioned one respondent. “It’s challenging to balance the competitive rental rate dynamics with the rising price of new equipment. While we’ve been able to achieve a very small overall rental rate enhancement, the cost to do so is increasing long-term customer attrition risk too. Customers are about at their pucker point, especially when competitors are offering undisciplined rates well below market norms in an attempt to buy the business.”

Others were more blunt about rate pressures they face. “Rates are not increasing, but all costs are,” said one. 

“Pricing squeeze, rates are down,” said another.

Blaming rate pressure on the biggest players has been a theme for decades in the rental industry, and was echoed here.

“Data centers have become a huge demand point. National rental houses have been very aggressive in that area, in turn driving down the price of rental rates,” said another respondent.

“The industry needs to continually raise prices to offset the increases in expenses,” summed up another. “We can all benefit from price adjustments.”

Business picking up

During the second quarter of 2026, 73 percent of respondents said business picked up during the quarter, while 17 percent said business mostly stayed the same, and only 10 percent said business decelerated during the quarter. Optimism is strong for the third quarter, with respondents averaging an expectation of a 7.5 percent year-over-year increase, with the expectation of 7 percent increase in general rental and 10.1 percent in specialty rental.

“Jobs are not getting pushed as they did last year,” said a Southern California respondent. “Starts are happening, and the third quarter looks to be a busy time for the SoCal market.

“Accelerated at the beginning of the quarter and slowing at the end of the quarter,” was another response. The ending could be weather-related. Overall choppy.”

“More large projects announced this quarter,” said another. “Should be good for all rental dealers in our area.”

Another respondent said there was “an uptick in local confidence.” 

Now the overview of 2026 is more positive than recent forecasts with 2026 revenue expected to increase 7.3 percent year over year, where last quarter’s respondents expected a 6.6-percent year-over-year hike. 2026 rates are now expected to increase 1.7 percent for the year, whereas in the first quarter survey, respondents predicted a 1.2-percent rate increase for the year.

The outlook for 2026 has improved compared to the start of the year for 44 percent of respondents, while only 17 percent are less optimistic.

Fleet growth

The number of units in respondents’ fleets grew 4.8 percent year over year in the second quarter higher than the previous several quarters. Respondents expect fleet spending to increase 4.3 percent year over year over the next six months. Last quarter, respondents expected a 5.4 percent fleet spending growth over the next six months. On the other hand, the cost of new units increased an average of 4 percent, said respondents. The past four quarters brought higher inflation than 2024 and the first half of 2025 because of tariff-induced price increases. 

“Data centers require the ‘nationals’ to place large orders with suppliers and are causing longer lead times for purchasing new,” said one respondent.

“Aerial manufacturers are unable to keep pace with demand,” said another. “Turnovers have increased recently in driver/technician roles.”

“Tariff are affecting buy price more than we would like,” was another concern.

The cost of fuel continued to be one of the major impediments to growth, as 81 percent of respondents said higher crude prices will have a negative effect on business.