15 April 2008
Results for this year's Rental Confidence survey indicate how diverse the lifting industry is around the world. Among these strong regional variations conclusions can still be drawn on the market situation and some trends identified.
Last year tower cranes were included in the survey for the first time and the bracketing for some of the questions has been adjusted in an attempt to improve the example of crane types and capacities to represent what makes up the majority of crane rental fleets around the world.
By region, performance can be summarised as outstanding in the Middle East, South Asia and Australia/New Zealand, very good in Europe and North America and generally good elsewhere. In forecast this looks set to continue with particularly good signs for further strong growth in the Middle East and in South Asia and increasingly good signs for strengthening performance in Central and South America.
On the strength of the market in South Asia one respondent says, “As of now and into the near future, markets are expected to rise by at least 25 to 40%.”
By crane type, fleets of mobiles are forecast to see the greatest expansion, led by 50 tonners but followed closely by 100 and 150 tonners. A quarter of those companies with 70 tonne crawlers plan to expand their fleets, closely followed by the 150 tonners and then tower crane owners.
In more detail, our survey shows that more than 80% of respondents in the Middle East have seen rates and utilisation rise in the last 12 months for 100 tonne mobiles and 60% forecast a further rise in utilisation for 2007. Confirming this buoyant situation in the Middle East are comments from respondents that say rental rates are increasing every month and that it is difficult to find cranes at short notice.
Positive forecasts (up to 83% of respondents by region) were recorded for rental rates to increase for all crane types, especially 50 and 100 tonne mobiles in the Middle East and Central and South America, closely followed by South Asia. Users in Asia Pacific are more cautiously optimistic with their forecasts.
While the biggest rise (40% of respondents saying utilisation will rise more than 10%) for 100 tonne mobiles is forecast for the Middle East, higher total increases are forecast for Asia Pacific and Europe.
Manufacturers can expect particularly strong business from fleet expansion activities for 50 tonne mobiles Australia/NZ and Central/South America, closely followed by almost half of respondents in Europe/CIS and South Asia. In the Middle East 20% of respondents forecast expansion while 80% expect no change in this class while figures for the larger mobile cranes in this region are much higher.
In the crawler crane sector, particularly strong expansion is forecast both for fleets of 70 and 150 tonne crawlers in Australia/NZ, South Asia and Asia Pacific. In the Middle East expansion is forecast to be greatest (67%) in the 70 tonne category while Europe/CIS in contrast shows no expansion and 71% of this capacity in the fleet staying the same.
Comments from respondents on the market in North America were positive in that, for example, it “looks strong through 2007,” and, “The crane market is booming at the moment all around the US, especially in the South, and everyone is capitalising on this market.” A more cautionary comment was that, “Even with increasing rates we continue to see rental companies that do not support the increased pricing. The industry must support and sustain these increases in order to allow continued investment, development and training.”
While things in Europe overall could have been better in recent years, comments in this year's survey were generally more positive, including, “Rates will rise, there are many projects ahead and demand will be bigger than the offer.” Changes can also be expected as a result of the latest expansion of the European Union and as they continue to filter through from the previous one.
On larger cranes outside the scope of this survey, there were positive comments from respondents in the US, including one who said there is long-term increasing demand for 300 tonne mobile cranes and another who says “Late model used cranes from 200 to 300 tonnes are very hard to locate for purchase.” In a similar vein another respondent said that large crawler cranes (440 ton capacity and up) are sold out for up to two years.
An observation on a broad section of the market in general was that “Crane rental is being driven by the ever expanding oil & gas and mineral resource industry trying to satisfy the insatiable appetite of the expanding Chinese market.”
A comment from a respondent in Asia Pacific sums up much of the world situation: “Even with current political instability in a number of areas in Asia and Asia Pacific, the trend for growth continues upward. World demand for natural resources continues to drive economies, world oil prices have no doubt impacted on some planned expansions and future projects, if oil prices remain high there may be a contraction, however, indications remain positive.”