French lift in ERA/IRN RentalTracker survey

By Murray Pollok14 November 2016

The ERA/IRN RentalTracker survey for the third quarter indicate that there has been no sudden downshift in sentiment in the UK rental market following the Brexit vote, and that confidence in France’s rental sector continues to grow.

The survey is created by International Rental News and the European Rental Association. The third quarter survey was carried out in the final two weeks of September and the first two weeks of October.

More than 70% of the French respondents reported improving business conditions at the time of the survey, and 68% reported that third quarter revenues were higher than in the same quarter of 2015.

French companies are optimistic about prospects for business 12 months from now, with 42% expecting improvements, and 63% are expecting higher revenues this year than in 2015. In terms of fleet utilisation, 68% were seeing improvements at the time of the survey.

That improved sentiment has not yet been translated into big changes in investment plans, with just 26% of French companies expecting to increase investment next year by more than 10%; and the same caution is evident in recruitment plans, with less than a third likely to hire more staff during the final quarter of this year.

The UK responses to the survey – with a smaller sample than usual - remain very positive. For example, not a single respondent reported worsening business conditions, and a whopping 80% said business activity in the third quarter – the first post-Brexit period – had improved compared to the same quarter in 2015.

Looking ahead, every respondent indicated that they were expecting improved business conditions in a year’s time, and a healthy 60% were expecting to increase capital expenditure in 2017. UK rental companies are also recruiting, with 80% expecting to add staff in the final three months of the year.

Overall for Europe, the positive balance of opinion for the third quarter of 2016 (the difference between the proportion reporting improving conditions and those reporting a deterioration) was a very healthy +50%, which is the highest level since the start of the survey.

Although a positive finding, it is worth noting that this also reflects the high number of responses from France (for which we thank DLR), which were the best for the country since the survey began (see discussion below).

Likewise, there was a +55% balance of opinion on expectations for business a year from now – compared to +35% in the first quarter of the year. Only a handful of respondents were anticipating worse business conditions a year from now.

The same was true of time utilisation, where the positive balance of opinion was +57%, almost a record. In terms of capital investment, around 34% of respondents are expecting to increase capital expenditure on their fleets next year.

The response to this quarter’s survey was lower than in previous quarters. The next survey, for which we expect to have a larger response, will be at the end of the first quarter of 2017.

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