Mixed confidence levels in European rental sector

12 July 2011

Click in the 'Images' box on the right to see three further graphs.

Click in the 'Images' box on the right to see three further graphs.

The ERA/IRN Rental Tracker survey for the second quarter of 2011 reveals continued uncertainty in rental markets in the UK and Italy in contrast to more positive environments in France, the Nordic region and Benelux.

The survey, completed by more than 200 companies in Europe, found that the vast majority - 86% - reported stable or improving conditions at the end of June. However, the proportion reporting improved conditions fell to 42% from 56% in the previous month.

The proportion seeing a worsening of conditions, just 13.5%, was the lowest since the survey started in early 2009.

The RentalTracker is a joint venture between International Rental News (IRN) magazine and the European Rental Association (ERA). The full results will be published in the July-August issue of IRN.

Italy is the country that has seen the biggest drop in sentiment since the first quarter - reflecting wider concerns about the Italian economy - and business confidence in the UK has also softened compared to the first quarter.

The biggest positive shift was in the Netherlands, where the balance of opinion on current business conditions (difference between proportions of respondents with positive and negative views) almost doubled to +53%. France and the Nordic region are the most positive, closely followed by the Netherlands.

Around 85% of companies are still reporting stable or improving time utilisation, but the number reporting improvements has fallen from almost 56% in the first quarter to 47% now, the lowest since the first quarter of 2010.

Investment levels are another key indicator of business confidence. The proportion of companies that expect to increase spending by more than 25% this year has risen to 18% from 13% in the previous quarter. This is still a modest number when considering the need to refresh fleets in Europe and the low historical levels of expenditure last year.

Regarding spending plans in 2012, 54% of all respondents expect to increase spending by more than 10%, although just 12% of the total expect to increase spending by 25% or more. A sizeable minority, 46%, will maintain spending at 2011 levels or even reduce it (8%).

Only one of the 32 UK/Irish companies who responded to the survey planned to increase capital expenditure by more than 25% next year, although 41% will increase spending modestly, by between 10% and 25%.

There was insufficient data from Germany and Spain to identify meaningful trends in the second quarter.

Our thanks to all the companies and individuals who took part in the survey. In particular we are grateful to Consurent in the Netherlands, Assodimi in Italy and the Construction Plant-hire Association (CPA) in the UK who helped distribute the questionnaires.

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