UK rental hardest hit by Covid-19 in Europe
By Thomas Allen01 July 2020
While all European rental markets have suffered as a result of the Covid-19 pandemic, the UK appears to be the hardest hit, with planned investment for 2020 down 40-70%, according to a recent survey conducted by the European Rental Association (ERA).
Pierre Boels, President of the ERA and CEO of Boels Rental, presented the results during the Rental Awards and Market Update webinar held on 30 June and organised by International Rental News magazine and the ERA.
According to survey respondents, rental activity in the second quarter of 2020 was down 40% in the UK, compared to the previous year. Looking ahead to the third quarter, activity is expected to be down 20-30%.
As a result, UK respondents are expecting to cut 2020 investment by 40-70%.
Also badly affected is Southern Europe, where second quarter activity was down 20-40%, and third quarter activity is forecast to be 10-15% lower than the previous year. 2020 investment in this region is expected to be 40-50% lower than the year before.
Meanwhile, Central and Northern Europe have seen a relatively softer impact.
Rental activity in the second quarter was reported to be 10% lower than normal in Central Europe, and third quarter activity is expected to be just 5% below prior-year levels. Respondents from these regions are, however, still expecting to cut investment by 20-50% this year.
Norther European respondents saw a 10% drop in activity in the first quarter, and are forecasting a 5-10% drop in the third quarter. Companies in this region are planning to reduce investment by just 10%.
Looking to the future of the rental industry, Boels said, “Of course, its future will be closely related to construction. The most important question is how much the construction market will recover over the next 12 to 18 months.”
He added that there is great uncertainty, and very few new projects are being launched.
However, he offered some hope, saying, “The future of our industry may be much brighter than we think, because rental is an essential part of the green recovery.”
Boels highlighted the Green Deal, which outlines the EU’s strategy to become a climate neutral continent by 2050, saying, “Despite the challenging circumstances, the pressing issue of climate change remains and will likely affect future business.”
The need for the construction sector to reduce its CO2 emissions to meet the Green Deal’s targets, he said, is promising for rental because, in environmental terms, it often compares favourably with the ownership model.
He also added, “After each recession, we see a growing number of rented versus owned fleet.”
Rental can help contractors manage the uncertainties caused by the crisis.
One other thing highlighted by Boels was the fact that the pandemic has had the effect of accelerating the adoption of digital processes, across all countries.
“More digitalised companies have been better able to cope with the crisis, being able to switch over to digital processes more easily.”