The ERA/IRN RentalTracker survey for the first quarter of 2014 should bring further comfort to the European rental industry, with a continuation of the generally positive trend of the past half year and particularly encouraging results from large, multinational rental companies and businesses in the UK.
There are also the first – modest – signs of life in Spain, with clear majorities reporting improving year-on-year utilisation rates and activity levels. There was still a negative balance of opinion on current business conditions – more reporting deteriorating conditions than improvements – but not by much. (The Spanish sample size is not large, so these positive signs should be treated with caution.)
The less happy markets of recent times remain so: Italy is either bottom or second bottom of every measure – activity levels, current conditions, utilisation trends, investment plans and employments.
France, too, seems to remain a flat market, with companies here among the least optimistic – none expected business to be ‘much better’ 12 months from now and only 14% were prepared to say ‘better’, the lowest in the whole region. Likewise, few French companies were reporting improvements in time utilisation (just 14%). French companies were also reporting the worst balance of opinion on current business conditions, with a negative balance of -33%.
Click on the graph to see seven graphs and charts on the results.
Overall for Europe, in terms of revenue expectations for the full year, there has been a definite improvement in sentiment, with almost half of all respondents expecting an increase in full-year sales and just 11.6% expecting a fall.
Here, 89% of UK companies expect full year revenue improvements, followed by Nordic companies (73%), multinationals (65%), Benelux (60%) and Spain (57%). This contrasts with the much flatter expectations in Italy and France, where just 22% and 14% of companies, respectively, expected full-year gains.
The survey, which is a joint venture between International Rental News (IRN) and the European Rental Association (ERA), was conducted in the final two weeks of March and the first week of April, and generated around 150 replies.
Looking at the total results for Europe, there are again reasons to be cheerful: the balance of opinion on current business conditions remained positive and marginally higher than the previous quarter; employment intentions have firmed up for the third quarter in a row, with 36.4% of all respondents expecting to recruit more staff in the second quarter of this year: the positive balance of +28.1% is the highest for three years.
There was a fall in the positive balance of opinion on business activity levels year-on-year in the first quarter, down to +20.7% from +33.1% at the end of 2013. Even so, double the number of companies reported increases in first quarter activity than reported deteriorating levels.
There has also been a small increase in fleet investment intentions, with 34% of all companies expecting to increase investment by at least 10%. Companies in the UK, Nordic region, multinationals and in Germany were the most likely to increase spending. The UK leads the way in this measure, with almost 60% of companies intending to significantly increase investment this year.
These investment intentions improve further in 2015, with 46% of companies planning to make +10% increases in CapEx next year. Nordic companies seem most bullish on this measure, but UK and multinational companies, along with German companies, also have higher than average spending plans.
Country wise, the trends from previous surveys are broadly confirmed. The UK remains the most positive rental market in the region, with multinational companies also feeling positive. Coming next in the list are Nordic companies, with similar or improved results in all measurement categories compared to the previous quarter.
German companies – on a small sample – also come near the top in most measures, notably on quarterly business growth and employment intentions. Benelux companies, meanwhile, remain firmly in the middle of the league table, with a declining positive balance of opinion on current conditions and a smaller proportion reporting quarterly year-on-year growth – 40% compared to 57% at the end of 2013.
In terms of the outlook 12 months ahead, the most optimistic companies are in the UK, with more than a third forecasting ‘much better’ conditions, followed by multinationals (20%), Nordic companies (18%) and Spain (14%).
Of course, ‘much better’ is saying quite a lot. Add in those prepared to say that conditions will be a more modest ‘better’ and the proportions rise dramatically – 56% of all companies in Europe, 100% of the UK respondents, and 60% or more in the case of Nordic, Benelux and multinational companies.
And again, Spain shows a clear positive trend, with 71% of companies expecting business in a year’s time to be better or much better.
IRN and the ERA would like to thank the following organisations for helping to distribute the survey: Assodimi (Italy), ConfalQ (Spain), Construction Plant-hire Association (CPA, UK), DLR (France), Hire Association Europe (HAE), Norwegian Rental Association, Danish Rental Association and the Association of Finnish Technical Traders.
The full reports on the results, including graphs and tables, will be published in the June issue of IRN.