The participants in the Baird/RER Rental Equipment Industry survey increased third quarter 2026 revenue 9.3 percent year over year, an improvement compared to the past couple of years. General rent increased by 6.7 percent, while specialty rental jumped 16.8 percent during the third quarter. 48 percent of respondents reported that the third quarter beat internal budgets, while only 5 percent reported worse-than-expected results, and 47 percent said their results were in line with the expectations. Therefore expectations were a 43-percent net positive for the third straignt quarter after nine negative quarters.

The Baird analysts wrote: “We see clear acceleration in activity (which carries into 2027 expectations on the subsequent slide) as data center investments are having a ripple effect broadening growth/investment, also coupling with growth in Power and a turn in Manufacturing construction.

“High interest rate and inflated costs are likely to keep local construction activity,” said one respondent. “Mega projects, despite costing more, are likely to keep going (unless there is political intervention.”

“There is work, but there seems to be a lot of wait-and-see,” said another, more skeptical respondent. 

“Data centers and large projects continue to drive construction activity in the area. Bringing rental fleet utilization up,” said a third.

The average rental rates were up 0.5 0ercent year over year. Rental rates have been gradually softening over the past several years, following a peak of 4.8 percent in the third quarter of 2022 as lower utilization/excess equipment supply has put downward pressure on rental rates. This quarter posted modest growth, although anecdotal commentary still points to a very competitive environment. The key for higher rates down the line is improved equipment supply/demand balance.

“Rentals have been up and down this year compared to the past, a little more inconsistent,” said one respondent. “Rates are not increasing quickly enough.”

“Rental rates continue to go down due to big box rental companies with lower time ute on certain cat classes,” complained another.

“Demand is pushing up the rates on used machines due to limited supply,” another said. 

“National competitors are cutting rental rates more frequently,” echoed a familiar refrain.

During the third quarter of 2026, 60 percent of respondents said business picked up during the quarter, while 39 percent said business mostly stayed the same, while only 1 percent said business decelerated during the quarter. 

Respondents expect revenue in the fourth quarter to increase 5.9 percent year over year, a healthy growth rate but slightly below the most recent quarter (3Q26), most likely because of a somewhat tougher comparison, seasonality and end-of-the-qear conservatism. Their forecast is for general rental to rise 4.7 percent said specialty to go up 9.5 percent.

“Optimistic about 2027 as long as (the president) doesn’t drive the economic bus off the cliff,” said one respondent.

“We have a lot of projects coming, and they are big projects: a $20 billion data center and a few other smaller ones. Power plant expansion and many other large and small commercial projects,” said another. “This would be happening sooner if it were not for midterms, war and fuel prices. But I think by the end of the first quarter next year, it’s going to take off.”

6.6 in ‘27

Respondents expectation for 2027 revenue is a 6.6-percent year-over-year increase, which is the best survey for the following year in the past two years. General rental is expected to increase 4.5 percent for 2027 and specialty rental 12.5 percent. Rates are expected to improve 2.8 percent year over year, compared to the approximate 1 percent growth rates in the past two quarters.

A positive outlook is expected by 55 percent, while only 5 percent are less optimistic compared to 2026, with about 40 percent expecting approximately the same level of revenue.

The number of units in fleets increased 6.1 percent year over year, higher than the previous several quarters. Respondents expect fleet spending to grow 4.1 percent year over year during the next six months. The cost of new units increased 2.8 percent year over year. The past five quarters brought higher inflation compared to 2024 and the first half of 2025 because of tariff-induced price increases, although inflation was somewhat lower this quarter.

Fleet spending is expected to increase 6.6 percent year over year in 2027; 4.8 percent on general rental fleets, and 11.9 percent on specialty.

“We are seeing a lot of manufacturers selling new old stock,” said one respondent. “We have bought several rollers this year that are new 2024 models at 30-percent off. Parts are also higher than in the past.”

The survey asked respondents: if you have data center construction activity in your market (s), have you seen other project types emerge after a data center project starts or is built? Eighty-eight percent of respondents have seen ancillary benefits from data center construction activity in their markets; 8 percent have not, and only 4 percent said they do not have data center construction activity in their markets.

“Data centers, warehouses, and healthcare are driving the market hard,” said one respondent. “Manufacturers are unable to keep pace. Other non-residential work is still slow but looks strong in 2027.”

Sixty-six percent of respondents said higher crude oil prices are expected  to have a negative impact on business.

“Wondering how long this fuel price rise can go on before a major market change,” said one respondent. “I don’t want to find out.”

“Inflationary pressure is holding homeowners back from spending  excess money on home projects,” said another. “Groceries, fuel and other rising living costs are eroding the excess monthly income they historically have spent on their homes.

“More uncertainty,” said a third. “High interest rates, high fuel costs, and an overweighting on AI project construction make our economy and industry vulnerable to a correction.”

In an additional comment from Baird, an analyst said, “As we look towards 2027, improved starts in manufacturing, massive 2026 starts in data centers, and ongoing growth in Power seem poised to turn non-res back to growth mode.”