French rental sees 7% fall in first quarter

The latest DLR survey on the French rental sector found that rental revenues fell by 7% in the first quarter of the year compared to the same period in 2009.

This reverses the previously slowing rate of falls, from a peak reduction of 17% in the second quarter of 2009 to a 14% fall in the third quarter and a 5% reduction in the final three months of 2009.

DLR said that rental companies had reported higher volumes of activity, but these higher volumes had been offset by increased pressure on pricing. Poor weather in the first three months of the year also depressed demand.

More promising were the results of the survey into forecasts for the next quarter, where 46% of rental companies were forecasting increased activity, compared to just over 10% at the end of 2009. Just 23% of respondents were forecasting worsening conditions, which compares to 45% and 60% in the previous two quarters.

DLR said the gradual recovery of the French equipment market still had several obstacles, including a tightening of government spending. "All the major European states need to undertake a fiscal consolidation effort stronger than originally anticipated", said DLR, "This probably means a higher tax burden, but, especially in the case of France, lower public spending.

"All bodies that make up the State will be affected: ministries, social security and local government. Public spending, for example on public works projects, will necessarily suffer sooner or later."

The survey found that the equipment distribution sector saw a 2% fall in activity in the first quarter of the year, while material hand.ing companies (forklift rental and similar activities) saw a 10% drop.