Optimism among European rental companies has moderated compared to recent highs but remains positive overall, according to the first-quarter 2019 ERA/IRN RentalTracker – which is jointly organised by IRN and the ERA.
The sentiment within the European rental market has remained relatively positive over the past couple of years, though there has been a gradual downward trend since the high in the first quarter of 2017. This has continued in the latest RentalTracker survey undertaken at the end of March this year, with the positive balance of opinion on current business conditions dropping from 44% in the third quarter of 2018 to 32% now.
That said, this is still a strong figure, considering it had struggled to reach above 25% between 2011 and 2016. (The ‘balance’ figure recorded for each question in the survey is the percentage of positive responses less the percentage of negative responses.)
We had more than 155 respondents complete the survey, which is the highest for several years and more than double the number for the same quarter in 2018. (IRN thanks the various rental associations in Europe for their help in distributing the survey.)
Looking at the overall trend of current market conditions, 44% of respondents said they felt market conditions were improving, which was only slightly counterbalanced by 12% of respondents who saw a deterioration, giving the positive balance of 32%. This compares to a balance of 44% in the third quarter of 2018 and 50% in the first quarter. The current 32% balance, although historically high for the survey, is the lowest since the first quarter of 2016, when the figure was just 18%.
The degree of positivity in each country was largely mirrored by the general perception of year-on-year growth, comparing Q1 2019 with Q1 2018. Taking Europe as a whole, 52% reported year-on-year growth, representing a drop from the 63% recorded in the previous RentalTracker six months ago. Also, the overall balance figure for year-on-year growth came to 42%, which is also down on the record 58% recorded for the third quarter of 2018. Though this latest positive balance on year-on-year growth is still relatively high, it is the lowest since the first quarter of 2016.
What are rental companies thinking about business conditions a year from now? There was a positive balance of 45% of respondents expecting market conditions to be better in the first quarter of 2020. This is a drop from the 62% recorded in the previous RentalTracker, as well as the 67% in the first quarter of 2018.
Overall, European rental businesses remain optimistic about business conditions a year from now, just slightly less optimistic than they were six months ago.
A full analysis of the first-quarter 2018 RentalTracker will be featured in the June issue of IRN.