The equipment rental industry has faced one of its most challenging years in recent memory, as the economic disruption of 2020 reshaped demand across construction, industrial, and infrastructure sectors. Rental houses reduced fleet sizes, project timelines shifted, and rate pricing came under sustained pressure. Yet by mid-November 2020, emerging data suggested that the worst of the rental rate decline may have passed. For industry participants seeking to understand where the market is headed, examining the detailed rental rate trends from this period offers valuable insight into patterns of recovery. For broader context on how the equipment rental market evolved throughout 2020, our earlier analysis in the March 2021 Rental Industry Report Equipment Rental Market provides a comprehensive look at the full-year trajectory.
Understanding the Rental Rate Recovery in Late 2020
As the COVID-19 pandemic disrupted construction activity beginning in early 2020, equipment rental rates entered a period of sustained decline. Construction and industrial production activity slowed considerably, reducing demand for rented machinery and pressuring rental houses to lower rates and trim fleet capacity. By mid-year, year-over-year rental rate comparisons had deteriorated steadily month over month, prompting concern about what the seasonal winter slowdown would bring.
Data Sources and Methodology
Analysts at M Science tracked general rental rates across more than 600 equipment SKUs at over 1,000 branch locations operated by the three largest rental companies in the United States: United Rentals, Sunbelt Rentals, and Herc Rentals. These three firms represent approximately 23 percent of the total equipment rental market, making their pricing data a reliable proxy for industry-wide trends. Data was collected on a bi-weekly basis, allowing for timely detection of shifts in rental rate momentum.
Key Findings at Mid-November
By mid-November 2020, general rental rates at United Rentals were trending down 2.4 percent year over year. While still negative, this marked an improvement from October trends of negative 2.7 percent year over year. The improvement was driven primarily by a less pronounced seasonal pullback in rental rates compared to what many industry observers had expected heading into the winter months.
The improvement was modest but meaningful. After months of steady degradation in year-over-year rental rate data beginning in April 2020, the November data points suggested that the downward pressure was beginning to stabilize. Analysts noted that if flat sequential rental rates held into December, year-over-year comparisons could improve further as the prior year comparison base eased considerably in the final month of the year.
Key rental rate trends from the mid-November data included:
- General rental rates at United Rentals improved from negative 2.7 percent Y/Y in October to negative 2.4 percent Y/Y in mid-November
- Rental rates quarter-to-date held up better than anticipated despite seasonal concerns
- Rental rate data remained stable through the 15th of November, suggesting resilience heading into the traditionally slower winter season
- The improvement reflected a less severe seasonal decline rather than a surge in absolute pricing
- December trends were projected to improve further as year-ago comparisons eased
Product Category Performance During the Recovery
Not all equipment categories experienced the same rental rate trajectory. By breaking down the data by product type, analysts identified meaningful divergence between categories that held up relatively well and those that faced more significant headwinds. Understanding these differences is essential for rental houses making fleet composition decisions and for contractors planning their equipment strategies.
Earthmoving and Material Handling Equipment
Earthmoving equipment and material handling equipment such as telehandlers demonstrated the greatest resilience through the downturn. Year to date, rental rates in these categories declined only modestly from April 2020 levels, dropping approximately 0.5 percent. This relative stability reflected sustained demand from infrastructure projects, site preparation work, and industrial applications that continued even during the broader economic slowdown. In mid-November, earthmoving equipment saw clear improvement in year-over-year rental rate trends compared to October readings.
Aerial Work Platforms Face Stronger Headwinds
Aerial work platforms, including scissor lifts and boom lifts, faced more notable pricing pressure. Year to date, AWP rental rates declined approximately 1.5 percent from April levels, three times the decline seen in earthmoving equipment. The sharper decline reflected the concentration of AWP demand in commercial construction, non-residential building projects, and facility maintenance applications that were disproportionately affected by pandemic-related shutdowns and occupancy restrictions. However, even in this category, mid-November data showed year-over-year rental rate trends improving relative to October, suggesting that the worst of the pricing pressure may have passed.
Category Comparison Summary
The following table summarizes how different equipment categories performed through mid-November 2020 relative to their April 2020 baseline:
| Equipment Category | Decline from April 2020 | Mid-November Y/Y Trend | October Y/Y Trend |
|---|---|---|---|
| Earthmoving Equipment | -0.5% | Improving | -2.7% |
| Material Handling (Telehandlers) | -0.5% | Improving | -2.7% |
| Aerial Work Platforms | -1.5% | Improving | -2.7% |
| General Rental Rates (All Categories) | -2.4% | Improving to -2.4% | -2.7% |
The data illustrates a clear pattern: while all categories continued to operate below year-ago pricing levels, the rate of decline was moderating across the board. Earthmoving and material handling equipment maintained the strongest relative pricing power, while AWP categories showed signs of catching up as the recovery broadened.
Regional Variations in Rental Rate Trends
Rental rate trends varied considerably across different regions of the United States, reflecting differences in local economic conditions, construction activity levels, and the mix of industries served by rental houses in each geography. Analysts tracked seven distinct U.S. regions and found that five of the seven showed improvement in year-over-year rental rate trends in mid-November compared to October. The principles of Building Science in Action Key Takeaways From the 2021 Midwest Building Science Symposium offer useful parallels for understanding how regional market dynamics interact with broader economic forces.
Regions with Stable or Near-Flat Rates
Three regions recorded rental rate trends that were largely flat year over year, representing the strongest relative performance in the country:
- Pacific West – Rental rates in this region held up better than most, supported by continued construction activity in major metropolitan areas and infrastructure investment.
- Midwest – The region showed relative stability, with manufacturing and agricultural activity providing a buffer against the worst of the rental rate declines seen elsewhere.
- Mountain West – Population growth and residential construction demand helped sustain rental activity and limit rate deterioration in this region.
Regions with Greater Rate Pressure
Four regions continued to experience year-over-year rental rate declines exceeding 2 percent, indicating more persistent pricing headwinds:
- Mid-Atlantic – Dense urban markets with high concentrations of commercial construction felt the impact of delayed projects and reduced office-related building activity.
- Northeast – Stringent pandemic restrictions and a slower reopening timeline contributed to continued rental rate pressure in this region.
- South – Despite generally favorable economic conditions, rental rates in the South remained under pressure due to increased equipment availability and competitive pricing.
- Southeast – Similar dynamics to the South region, with rate trends remaining negative despite improvement from earlier in the year.
This regional divergence matters for rental companies with multi-state operations. Understanding which geographies are recovering faster allows fleet managers to reposition equipment strategically and allocate capital more efficiently. The application of data-driven approaches, much like the Science Art Paint Color Selection Insights Trends Naming methodology used in building material selection, demonstrates how systematic analysis of market data leads to better business decisions.
Strategic Implications for Rental Industry Participants
The rental rate trends observed in mid-November 2020 carry important implications for equipment rental companies, contractors, fleet managers, and investors monitoring the construction industry. While the data points to modest improvement rather than a dramatic turnaround, the direction of change matters more than the absolute level for strategic planning purposes.
Fleet Management Considerations
For rental companies evaluating fleet composition and capital expenditure plans, the product category data offers clear guidance. Equipment in earthmoving and material handling categories maintained stronger pricing power throughout the downturn, suggesting that these segments should remain priorities for fleet investment. The sharper decline in AWP rental rates, while improving, indicates that AWP fleet expansion should proceed with caution until demand recovery is more firmly established.
Key fleet management strategies based on the mid-November data include:
- Prioritize earthmoving and material handling equipment for fleet renewal programs, as these categories demonstrated the strongest rate resilience
- Monitor AWP utilization rates closely before committing to significant fleet additions in this category
- Consider regional rebalancing of equipment inventories to align with faster-recovering geographies
- Use bi-weekly rate data to inform dynamic pricing strategies rather than annual or quarterly rate resets
- Maintain fleet age discipline even during recovery periods to preserve pricing power and reduce maintenance costs
Pricing and Contract Strategy
The improving rental rate trends suggest that the window of maximum pricing pressure was receding by late 2020. Rental companies that held firm on pricing during the downturn were positioned to benefit from the stabilization. For contractors and end users, the data signaled that locking in rental rates for longer-term projects in early 2021 could capture favorable pricing before further improvement reduced negotiating leverage.
The data also highlighted the importance of product-specific and region-specific pricing strategies. National average figures masked significant variation beneath the surface. A rental company operating across multiple regions needed different pricing approaches for earthmoving equipment in the Pacific West versus AWP equipment in the Northeast. The Equipment Rental Profiles Building a Stronger Rental Business framework provides additional guidance on how rental companies can use industry visibility and market intelligence to strengthen their competitive position.
Looking Ahead to 2021
The mid-November data provided several reasons for cautious optimism heading into 2021. The improvement in year-over-year rental rate trends, the resilience of earthmoving and material handling categories, and the broad-based regional improvement all pointed toward a market that was stabilizing after months of deterioration. Analysts projected that if flat sequential rental rates held, December year-over-year comparisons would improve further as the comparison base from late 2019 and early 2020 became more favorable.
However, several risks remained that could disrupt the recovery trajectory:
- Renewed pandemic-related restrictions could slow construction activity and reverse the improvement in rental rate trends
- Increased equipment supply entering the market as rental houses refresh fleets could create renewed downward pressure on rates
- Regional economic disparities could persist, with some geographies recovering faster than others
- The seasonal winter slowdown could mask whether the improvement was a genuine trend shift or a temporary reprieve
Rental companies that invested in data analytics capabilities, maintained disciplined fleet management, and adopted regionally nuanced pricing strategies were best positioned to navigate both the risks and opportunities that 2021 presented. The mid-November rental rate data, while representing only a single snapshot in time, offered an encouraging signal that the equipment rental market was on a path toward recovery, even if the journey remained gradual and uneven across different equipment categories and regions.