Compact Power Equipment Rental Market Size, Share and Trends 2026 to 2035

Revenue, 2025

USD 36.80 Bn

Forecast Year, 2035

USD 48.98 Bn

CAGR, 2026 - 2035

2.90%

Report Coverage

Global

What is the Compact Power Equipment Rental Market Size in 2026?

The global compact power equipment rental market size accounted for USD 36.80 billion in 2025 and is predicted to increase from USD 37.87 billion in 2026 to approximately USD 48.98 billion by 2035, expanding at a CAGR of 2.90% from 2026 to 2035. The market is driven by increasing infrastructure development, urbanization, and technological advancements.

Key Takeaways

• North America led the compact power equipment rental market with 44% share in 2025.
• The Asia Pacific is observed to be the fastest-growing region in the forecasted period.
• By application, the construction segment led the market with the largest share in 2025.
• By application, the industrial segment is expected to grow at the fastest rate in the foreseeable period.
• By power source, the diesel segment led the global market with a major share in 2025.
• By power source, the electric segment is expected to expand at the fastest rate in the upcoming period.
• By equipment type, the generators segment dominated the global market in 2025.
• By equipment type, the light tower segment is observed to be the fastest growing in the foreseeable period.
• By rental duration type, the short-term rentals segment led the market in 2025.
• By rental duration, the long-term rentals segment is expected to grow at the fastest CAGR during the forecast period.
• By end user, the contractors segment led the global market with a major share in 2025.
• By end user, the small businesses segment is expected to expand at the highest CAGR in the foreseen period.

Market Overview

The compact power equipment rental market is steadily expanding, driven primarily by growing demand in the construction and landscaping sectors. The integration of digital rental management systems and online booking interfaces is optimizing operational workflows, improving asset utilization, and enhancing overall service efficiency. Market growth is primarily supported by the economic advantages of equipment leasing, which enable end users to minimize capital investments and reduce ownership-related liabilities. In response to evolving urban project requirements, rental providers are expanding their portfolios with specialized machinery designed for space-constrained applications, including compact excavators and mini loaders, thereby strengthening their competitive positioning within the market.

Impact of Artificial Intelligence on the Compact Power Equipment Rental Market

Artificial Intelligence has emerged as a powerful tool in the compact power equipment rental market, turning raw operational data into actionable business insights. It detects usage trends, forecasts demand, monitors fleet health, and streamlines customer interactions. AI assistance supports inventory management, seasonal trends, competitor rates, and availability. AI enables real-time pricing, suggestions, and automatic adjustments.

By analyzing customer behavior, market trends, and external factors, it predicts future equipment demand. Integration with telematics and sensors allows predictive maintenance planning. Combined with IoT, chatbots, and virtual assistants, AI enables real-time tracking of equipment location, usage, and condition, while also aiding fraud detection. From raw data, AI extrapolates insights to drive better decision-making and operational efficiency in the rental business.

Key Market Trends in the Market

• Rising integration of telematics and IoT sensors enables real-time monitoring of equipment health, location, and utilization, enhancing operational efficiency and asset management capabilities.
• Growing focus on sustainability is driving rental companies to invest in eco‑friendly equipment, attracting environmentally conscious consumers and supporting greener operational practices across the market.
• Rising preference for short-term rentals highlights the demand for flexible, reliable, and cost-efficient solutions, enabling businesses to address immediate project needs.

Market Scope

Segment Insights

Application Insights

What Made Construction the Dominant Segment in the Market?

The construction segment dominated the compact power equipment rental market with the largest share in 2025, driven by strong demand for construction equipment and ongoing infrastructure development projects. Increased use of compact equipment such as skid steers, mini excavators, and track loaders in the construction sector also contributed to the segment's dominance. Rental solutions allow construction companies to access advanced equipment without large capital investments, supporting project scalability and efficiency. Moreover, large-scale construction projects worldwide are boosting the consumption of power equipment via rental, thereby ensuring the long-term growth of the segment.

The industrial segment is expected to grow at the fastest CAGR in the upcoming period, driven by rising demand for portable, efficient machinery in manufacturing, warehousing, and plant maintenance operations. As infrastructure evolves and urbanization accelerates, businesses are increasingly opting for rental solutions to alleviate upfront capital costs, reduce maintenance burdens, and increase operational flexibility. This shift enables companies to scale equipment use up or down based on project needs, pilot new machinery without long-term commitments, and maintain business continuity during peak demand or unplanned outages. The growth of the segment is further supported by automation, maintenance efficiency, and the need for specialized tools for industrial tasks, making rentals a cost-effective and scalable solution.

Power Source Insights

Why Did the Diesel Segment Lead the Market In 2025?

The diesel segment emerged as the dominant category in the compact power equipment rental market in 2025. Diesel remains the largest power source due to its suitability for high-efficiency, high-load equipment and heavy-duty applications. Its ability to perform reliably under demanding conditions makes it the preferred choice for contractors engaged in rigorous tasks. Diesel-powered equipment is extensively used on construction sites, in mining operations, and across various industrial facilities where access to the power grid is limited or unreliable, reinforcing its leading position.

The electric segment is expected to grow at the fastest rate over the forecast period. This is due to the growing popularity of electric-powered equipment among environmentally conscious consumers and in applications that require low emissions. Advancements in battery technology and increasing urbanization are further accelerating this growth. In addition, the rising demand for sustainable and cost-effective solutions positions electric equipment as a compelling choice. It has become a powerful option for light- to medium-duty tasks in residential areas and for projects with a strong focus on sustainability.

Equipment Type Insights

How Does the Generators Segment Dominate the Market in 2025?

The generators segment led the compact power equipment rental market in 2025, holding the highest share, driven by their reliability and versatility. Generators are used across a wide range of sectors and large-scale projects, such as construction and events, and are also a preferred solution for emergency power supply. Rising demand for uninterrupted and reliable power, rapid industrialization, expanding manufacturing activities, and growing infrastructure development are significantly increasing generator demand, thereby supporting overall market growth.

The light towers segment is expected to expand at the fastest CAGR throughout the forecast period, driven by the increasing demand for outdoor illuminated work environments. With advancements in LED technology and improved energy efficiency, light towers are becoming more popular, particularly at construction sites and events requiring nighttime operations. The growing focus on safety and productivity, along with the rising use of light towers in sports and entertainment, is further driving the segment. Increased adoption of LED lighting systems, growth in the construction industry, and the need for safe lighting solutions are key factors supporting the rapid growth of the light tower segment in the market.

Duration Type Insights

Why Did the Short-Term Rentals Segment Lead the Market in 2025?

The short-term rentals (less than 30 days) segment dominated the compact power equipment rental market with the largest share in 2025. This is because it offers flexibility and cost savings for projects with a limited duration. Short-term rentals appeal to customers seeking flexibility for temporary projects and urgent needs. Short-term rentals are popular due to their adaptability, allowing consumers to meet immediate operational requirements.

At different stages of a project, requirements vary, and short-term durations enable users to change equipment based on specific needs and extend the rental period if required. Moreover, the growth of e-commerce and automated micro-fulfilment centers in urban areas presents a significant opportunity, driving demand for short-term rental of compact power equipment. With rapid urbanization and the expansion of various sectors, the demand for short-term rentals is rising.

The long-term rentals (over 180 days) segment is expected to expand at the fastest CAGR during the forecast period as businesses seek cost-effective alternatives to purchasing expensive machinery for extended projects. Long-term rentals are widely adopted for large-scale, high-value, long-duration projects, typically exceeding 180 days, where continuous equipment availability is critical. For equipment needed over extended periods, long-term rental provides enhanced cost efficiency and ensures operational stability.

The segment growth is also driven by increasing businesses preference for leasing equipment to minimize upfront capital expenditure and reduce maintenance costs. Furthermore, rising construction activity, ongoing infrastructure development, and the shift toward sustainable practices that emphasize equipment sharing are further accelerating the growth of the segment.

End User Insights

Why Did the Contractors Segment Lead the Market in 2025?

The contractors segment dominated the compact power equipment rental market with a major share in 2025. This is because contractors are increasingly leveraging rental services to meet project-specific equipment requirements without incurring the high costs associated with ownership. Construction projects often require heavy machinery and specialized tools for limited durations, making ownership impractical once the project is completed. As a result, contractors prefer rental solutions that provide access to reliable, high-quality power equipment along with supporting services, enabling them to efficiently manage diverse construction activities without long-term asset commitments.

The small businesses segment is expected to grow at the fastest rate in the coming years, driven by a growing preference for rental models over outright equipment purchases, particularly for short-term or project-based requirements. Renting enables these businesses to optimize cash flow and limit capital expenditure, enhancing financial flexibility. This trend is evident in industries such as landscaping and event planning, where seasonal demand fluctuations make equipment ownership less economically viable.

Regional Insights

North America Compact Power Equipment Rental Market Size and Growth 2026 to 2035

The North America compact power equipment rental market size is estimated at USD 16.19 billion in 2025 and is projected to reach approximately USD 21.80 billion by 2035, with a 3.02% CAGR from 2026 to 2035.

What Made North America the Dominant Region in the Compact Power Equipment Rental Market?

North America dominated the compact power equipment rental market with the largest share in 2025, driven by increased construction activities, a growing preference for rental services over ownership, strong purchasing power, and the early adoption of advanced technologies. Regulatory support for construction and environmental sustainability initiatives continues to stimulate demand. The incorporation of technologies such as telematics, fuel cells, batteries, and transformers in equipment, including pumps, generators, compressors, bulldozers, and power tools, is contributing to market expansion by improving efficiency, lowering operational costs, and enhancing safety. Increasing use of digital rental platforms is also intensifying market penetration and competition among both established and emerging players.

U.S. Compact Power Equipment Rental Market Size and Growth 2026 to 2035

The U.S. compact power equipment rental market size is calculated at USD 12.14 billion in 2025 and is expected to reach nearly USD 16.46 billion in 2035, accelerating at a strong CAGR of 3.09% between 2026 and 2035.

U.S. market Analysis

Within North America, the U.S. is a key contributor to the market, supported by advanced R&D ecosystems, favorable regulations, high levels of corporate investment, and rapid enterprise-wide technology adoption. Canada, meanwhile, is also a top importer and is experiencing steady growth driven by strong government support, vibrant innovation clusters, and rising demand from enterprises seeking premium, innovation-focused solutions.

How is the Opportunistic Rise of Asia Pacific in the Market?

Asia Pacific is expected to grow at the fastest rate in the upcoming period, driven by its large population, rapid urbanization, and strong government initiatives supporting digital and industrial modernization. Growth is further supported by rising investment in construction projects and expanding industrial activities across the region. China and India are at the forefront of this expansion, contributing significantly to overall regional development. The market is expected to grow further due to increasing demand for cost-effective rental solutions among contractors and businesses.

Compact Power Equipment Rental Market Companies

• United Rentals, Inc. (USA)
• Sunbelt Rentals (Ashtead Group) (UK/USA)
• Herc Rentals Inc. (USA)
• Aggreko Plc (UK)
• Caterpillar Inc. (USA)
• Loxam Group (France)
• Boels Rental (Netherlands)
• Atlas Copco AB (Sweden)
• Wacker Neuson SE (Germany)
• The Home Depot Inc. (USA)
• Kiloutou Group (France)
• Kanamoto Co., Ltd. (Japan)
• Speedy Hire Plc (UK)
• H&E Equipment Services, Inc. (USA)
• Finning International Inc. (Canada)

Segments Covered in the Report

By Application

• Construction
• Industrial
• Residential
• Utilities
• Others

By Power Source

• Diesel
• Gasoline
• Electric
• Hydraulic
• Others

By Equipment Type

• Compressors
• Generators
• Light Towers
• Pumps
• Others

By Rental Duration

• Short-Term Rentals (less than 30 days)
• Mid-Term Rentals (30-180 days)
• Long-Term Rentals (over 180 days)

By End User

• Contractors
• Small Businesses
• Homeowners
• Government Agencies
• Others

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa