European rental sentiment steady in third quarter
By Murray Pollok06 October 2010
Business confidence in the European rental sector in the third quarter of 2010 showed little dramatic improvement on the previous quarter, although sentiment remains markedly better than at the start of the year.
In the ERA/IRN RentalTracker survey for Q3, 45% reported improving current business conditions and 39% said conditions were stable. Just 17% said conditions were deteriorating, which is marginally worse than in the second quarter but significantly better than at the end of the first quarter of the year when almost one in four were experiencing deteriorating conditions.
The ‘business conditions now' findings are very similar to those at the end of the second quarter of the year, with a positive balance of opinion of +28% compared to +34% in the previous quarter. However, strip out the responses from Spain - where conditions continue to deteriorate - and the result becomes more optimistic, with a +34% positive balance of opinion.
Companies reported higher levels of business activity in the third quarter compared to the same period in 2009, with 36% seeing higher activity and 18% reporting a "strong improvement". The positive balance of opinion here increased from +23% in the second quarter to +41%.
Some 15% of respondents reported that total Q3 business was lower than in the same quarter in 2009. This compares to 81% in the second quarter of 2009 and 51% in the first quarter of 2010, illustrating that the falls in revenues year-on-year are now starting to be reversed, although slowly.
Improvements in fleet time utilisation, which was notably better at the end of the second quarter, appear to have stalled, with the proportion reporting improving utilisation falling from 64% in Q2 to 57% now. The balance of opinion remained good at +41%, but that compares to +50% at the end of the second quarter.
Plans for capital investment in 2011 provide some positive news, with 25% of respondents saying that they would increase spending by more than 25%. Around 29% said spending would go up by more than 10% and just 15% of respondents said investment would decrease in 2011. This represents a +39% positive balance of opinion.
Finally, on employment intentions in the next quarter, the surge of optimism evident at the end of the second quarter appears to have receded slightly. Three months ago 40% of companies said they would increase their staff numbers in the third quarter. That figure has dropped to 29% now. The majority of companies, 60%, will keep their staff numbers stable and 11% plan to cut staff.
This ERA/IRN RentalTracker survey for the third quarter was the first to be carried out in five languages, and the number of respondents has increased as a result, with almost 160 companies responding.
The survey also saw increased levels of sensitivity introduced into the questions, with companies given the option of choosing between modest and significant levels of improvement (and moderate or severe decreases). The Q3 survey also included more detailed questions on investment plans for 2011 and 2012.
The full results of the survey, including the extended fleet investment data and a regional analysis, will be published in the Nov-Dec issue of IRN and on the European Rental Association's website (www.erarental.org).