The ERA/IRN RentalTracker survey for the final quarter of 2012 shows a continuation of the deteriorating confidence trend in Europe evident since the middle of last year, although there are some positive results as well as big differences across the region.
Of the almost 200 respondents surveyed at the end of December a significantly larger proportion reported deteriorating conditions (34.7%) than were seeing improvements (18.1%). The resulting negative balance of opinion of -16.6% is, however, an improvement on the -22.3% reported in the third quarter of 2012.
Companies in Italy, France, Spain and the Benelux, as well as large multinational renters, all had large negative balances of opinion on business conditions at the end of December. More positive were companies in Russia, Germany, the UK and the Nordic region.
The RentalTracker survey for Europe is a joint venture between the European Rental Association (ERA) and the International Rental News magazine. The full results of the survey will be published in the Jan-Feb issue of IRN.
For Europe viewed as a whole, there were some positive findings. In measures such as fleet utilisation, revenues for the final quarter and full year, expectations a year ahead, and short-term employment intentions, there were small or significant improvements.
There was a real uptick in expectations for business a year from now (a +16% balance of opinion compared to less than +1% three months earlier) and a significant upward shift in utilisation (more seeing an improvement, fewer reporting a deterioration).
The Q4 ERA/IRN RentalTracker survey was completed by 198 companies in the final two weeks of December and the first week of January.
Employment intentions have hardened slightly, with almost a quarter of the 200 respondents reporting an intention to take on more staff in the first quarter of this year. That’s a percentage point up on three months earlier.
In terms of levels of revenue for the final quarter of the year, there is consistency with previous quarters in 2012, with an almost even balance in opinion, although slightly positive. In each of the four quarters of 2012 between 26 and 30% of respondents reported falling revenues, while those reporting increased revenues hovered between 31 and 40%. Rental companies found it hard to match the revenue increases they were seeing in 2011, when year-on-year comparisons were easier.
For capital expenditure, meanwhile, the overall picture is one of stability, with a very slight rise to 27% (from 26% in Q3) in the proportion of companies expecting to increase fleet CapEx this year.
There is a very mixed view when individual countries or multinational companies are considered.
The survey clearly finds the region’s big multi-nationals in cautious mood. Although a large proportion (71%) reported higher revenue levels in 2012, in every other measure they were below the Europe-wide average.
For example, just 17% were reporting improving utilisation, and there was a worse than average balance of opinion on current business levels (measured at the end of December). They are not optimistic for the near future - not one multinational felt able to predict ‘much better’ business levels in a year. No multinationals in the survey expect to increase CapEx this year by more than 10%.
Similarly, French rental companies do not have big spending plans this year, are less likely to employ more staff, and have a much worse balance of opinion (-39%) on current business conditions than the average. They also share with multinationals are rather pessimistic view about prospects of major improvements a year from now.
What was striking about the results from the Benelux, meanwhile, was that more than half (53%) were reporting deteriorating conditions at the end of 2012 – that is more than any other territory.
The Nordic region, which was notably more confident than the rest of Europe during 2012, is still above the average in most measures, although its optimism has taken a hit. Its positive balance of opinion on current conditions – the difference between the proportion of respondents with positive and negative views - has slipped from +27% at the end of Q3 to a neutral 0 by the end of the year.
More positive are the findings from Germany, the UK and Russia. Russia remains the star of the survey, with its rental companies top or second in all categories.
Results from Germany remain solid – in particular seeing increases in utilisation and year-on-year revenues – and there has been a real improvement in sentiment in the UK. It is now above average in all categories and companies in the UK were most positive about current business conditions (a positive balance of opinion of +13%).
IRN would like to thank the following organisations for helping distribute the survey to their respective members in Europe: Assodimi (Italy), ConfalQ (Spain), Construction Plant-hire Association (CPA) (UK), Consurent (Netherlands), DLR (France), Hire Association Europe (HAE) and RusRental (Russia).