The ERA/IRN RentalTracker survey for the third quarter of 2011 shows an unsurprising fall in confidence levels across European rental businesses.
Data from more than 290 companies in Europe - surveyed at the end of September and start of October - shows that the proportion of businesses seeing improving conditions has fallen to 31.2%, compared to 42% at the end of the second quarter, while the number reporting worsening conditions has doubled to 27%.
This results in a small +4% positive balance of opinion on current business conditions, which is the lowest level of confidence since the first quarter of 2010. The previous five quarters had produced positive balances of opinion ranging from +41% (Q1 2011) to +25% (Q3 2010).
The dampening of confidence levels reflect wider concerns about Europe's economic prospects.
These concerns are seen also in the recruitment plans at rental companies, with just 27% expecting to add workers in the final quarter of this year, which is the lowest level since we started measuring employment intentions in the second quarter of 2010.
The RentalTracker survey is carried out every quarter by International Rental News (IRN) magazine and the European Rental Association (ERA). The full results - including detailed information on fleet investment plans for 2012 and 2013 - will be published in the November-December issue of IRN.
The chart above left shows the finding on fleet utilisation, while click on the illustrations on the right for a further five graphs and charts.
Fleet investment plans for 2012 have been revised downwards, although not dramatically. Around 35% of companies said they will increase fleet investment by more than 10% next year, which is down from 54% in the previous quarter. Some 22% of respondents said they would reduce spending next year, which compared to just 8% in the second quarter.
Regionally, it is Nordic companies, Multinational firms and those in Germany and France who are reporting the best conditions and who are the most optimistic. Overall, less than a quarter of rental businesses are forecasting increases in business activity of more than 10% in a year from now.
Renters in Italy and Spain are the least optimistic, and the survey reveals a dramatic downwards trend in Italy. More than half the Italian respondents reported worsening business performance during the quarter and Italian companies are the least likely to increase fleet investment next year. Italian and Spanish companies are also the least likely to forecast business growth next year.
The one area where rental companies can take comfort is in the results for utilisation, which confirm that utilisation rates remain stable or continue to increase. Although the proportion reporting decreasing utilisation rates has increases from 15% to 19%, the number seeing increases rose to 49%, giving a positive balance of opinion of 30%, which is almost the same as the previous quarter.
Rest of the World Survey
In addition to the ERA/IRN RentalTracker survey, IRN has conducted an additional rental confidence survey for the rest of the world. Based on more than 150 responses, the survey shows that current business conditions in every region of the world are better than in Europe.
Overall, there was a positive balance of opinion on current business conditions of 29% (45% reported an improvement and 16% reported deteriorating conditions). Regionally, South America was the most positive (+60%), followed by the Middle East (+44%), India (+40%) and the US/Canada (+25%).
The full results of the Rest of the World survey will also be published in the Nov-Dec issue of IRN.