Navigating 2025: The State of the Rental Industry

The rental industry in 2025 is experiencing both growth and challenges as economic conditions, technological advancements and evolving construction trends are reshaping the market. While certain sectors continue to thrive due to infrastructure investments and sustainability initiatives, others experience stabilization or decline.

Let’s take a look…

Industry Growth & Challenges

Construction sectors expected to grow in 2025 will include:

• Residential Construction: Rebounding due to sustained suburban and rural housing demand
• Nonresidential Construction: Growth driven by healthcare, education and digital infrastructure investments
• Infrastructure Development: Boosted by government initiatives (IIJA, IRA)
• Technology & Sustainability: Increased use of AR, AI, modular construction and sustainable practices

With increased construction activity, the demand for rental equipment will rise largely because long-term rental contracts provide a cost-effective alternative for construction firms looking to avoid high capital investment costs. By expanding rental equipment offerings to include modern, high-demand equipment, including electric machines, independent rental companies can position themselves to take full advantage of the construction boom and drive long-term profitability.

Construction sectors that may decline this year could be:

• Data Centers & Warehouses: Declining due to space saturation and slower e-commerce growth
• Manufacturing Construction: Stabilizing as major projects conclude and economic uncertainty impacts investments

Challenges include tighter credit, rising costs, declining property values and supply chain disruptions.

JLG is well-positioned to adapt to the changing landscape in 2025 and beyond. We are a global manufacturer with facilities worldwide to meet customers’ needs and respond to market demands. We adopted a regional production strategy long ago, and this nimbleness will facilitate our adaptation to the ever-changing environment. 

Economic Outlook & Rental Industry Impact

Economic factors influencing equipment rental in 2025 will be:

• Industry growth is forecasted to be moderate
• Inflation and economic shifts may impact demand and profit margins
• Government infrastructure investments will support rental demand

In 2025, strategic adaptations that focus on technological innovation (integrating digital solutions and sustainable practices to drive operational efficiency and open new market opportunities) and sustained infrastructure investments (ongoing government initiatives are expected to bolster demand for rental equipment) are expected to support the rental industry’s continued growth in the coming year.

The impact of high interest rates in 2024 in 2025 and beyond are:

• Increased cost of capital slowed fleet expansion
• Higher borrowing costs reduced new construction projects
• Profit margins were pressured, but rental demand rose as a cost-effective alternative to purchasing

On the positive side, higher interest rates have increased demand for rentals as a more cost-effective alternative to purchasing new equipment outright. This trend benefited rental companies with well-maintained fleets.

Looking forward, rental demand is expected to remain strong in 2025. As long as borrowing costs remain elevated, more construction firms will choose to rent rather than buy, benefiting rental companies. This could limit equipment availability, leading to potential rental rate increases. Also, government-backed infrastructure projects, which are less affected by interest rate hikes, will continue driving demand for rental equipment. Companies that align with public works projects will be more insulated from economic downturns.

Technology & Equipment Advancements

The changing workforce, marked by a shortage of skilled labor, the retirement of older generations and the entrance of more tech-savvy individuals, has significantly influenced product development in the equipment rental industry.

Recent advancements that have impacted equipment rental are:

• User-Friendly Design: Simplified controls and common parts improve accessibility for less experienced workers
• Enhanced Diagnostics: Services like JLG^® ClearSky Smart Fleet™ and Online Express help equipment owners optimize maintenance
• Data Utilization: Faster data consolidation informs product development and fleet management

As data collection becomes more affordable and widespread, everyone in the rental ecosystem — from manufacturers to rental companies and renters — can leverage this shift by gathering more detailed information into machine usage and performance. This influx of data can provide actionable insights to optimize fleet management and maintenance now and inform future decisions based on real-world trends.

Areas that technology will impact most in rental include:

• Safety & Efficiency: Robotics and autonomy reduce operator risk and enhance productivity
• Fleet Management: Increased data collection optimizes maintenance and operational decisions

Harnessing the power of data and integrating advanced technologies, like robotics and autonomy, with modern construction management practices can help rental companies and renters make everyday job site tasks more efficient and sustainable while simultaneously helping manufacturers make the equipment more capable and intuitive.

Key Industry Disruptors & Opportunities

Looking ahead, the biggest disruptor in the rental equipment industry is a construction technology marketplace that will continue to evolve rapidly. As the construction industry faces challenges similar to those faced by other sectors — such as eliminating safety risks and improving efficiency — integrating these technologies will play a key role.

• AI & Robotics: Expanding automation will enhance safety and efficiency
• Modular Construction: More off-site assembly will reduce on-site risks
• Smart Equipment: Increased autonomy and IoT integration will reshape job site operations

At JLG, we believe that the future of the construction technology marketplace will be shaped by smarter, more automated machines that enable workers to do more while enhancing safety and productivity. JLG will continuously innovate and adapt its equipment to meet these changing needs, ensuring its products are at the forefront of this technological revolution.

Key Insights for a Changing Market

Every year, our rental store partners provide insights into how the latest product launches and current market trends affect the rental equipment industry. We also examine where equipment end-users, including renters, want to take that technology and where our products are so we’re ready to go.

From these discussions, JLG anticipates key industry trends shaping access equipment in 2025 will include:

• Connectivity & IoT: Cloud-based fleet management and remote troubleshooting improve efficiency.
• Autonomous Features: Semi-autonomous navigation and robotics enhance productivity
• Compact, High-Efficiency Machines: Growing demand for space-optimized equipment
• Labor Shortages: Addressed through automation and VR-based training
• Safety Innovations: Anti-entrapment systems, proximity detection, and load-sensing technology
• Regulatory Compliance: ANSI standards continue shaping equipment choices

JLG uses these insights to inform improvements and upgrades. We refine existing designs based on feedback and performance data, making adjustments that enhance safety, efficiency and usability. This iterative process ensures that new products build on the success of their predecessors while incorporating the latest technological advancements. Ultimately, JLG funnels industry feedback into every stage of product development to drive meaningful innovations that improve safety, productivity and overall user experience.

The Rental Industry’s 2025 Roadmap

As the rental industry navigates 2025, it faces a dynamic landscape shaped by economic shifts, technological advancements and evolving construction trends. The adoption of robotics, AI and modular construction transforms operations, enhancing safety and improving efficiency. Companies that embrace innovation and respond to industry demands will be best positioned to capitalize on growth opportunities in the evolving rental market.

For more information on topics impacting the rental industry in 2025, including equipment advancements and future technologies, visit jlg.com/direct-access