RentalTracker survey for Europe reveals ‘wait and see’ attitude

24 April 2012

Confidence in the European rental market was steady at the end of the first quarter of the year, according to the ERA/IRN RentalTracker survey for Q1 2012, although there remains a wide variation in business sentiment across the region.

Overall there was a slight improvement in the proportion of respondents seeing improving business conditions - up to 30.9% from 28.6% - and a fall in the number reporting deteriorating conditions (just 23.8%).

However, the continued uncertainty over Europe's wider economy - and in particular the sharp deterioration in confidence levels in Italy - are reflected in a weakening in employment intentions, with a fall to 25% in the number of companies expecting to add to their workforce in the second quarter of the year. This compares to the 35% of companies at the end of 2011 who said they would recruit more staff in the first quarter of 2012. (See the six graphs attached to this story.)

The RentalTracker is a joint venture between International Rental News (IRN) magazine and the European Rental Association (ERA).

With fleet investment the proportion expecting to increase spending by more than 10% this year has actually increased from 31% to 35%m compared to the final quarter of last year. Although improving, that proportion is not high in the context of the low capital expenditure over the last three years. It is clear that European rental companies remain cautious about increasing their fleet CapEx.

There has also been a slight deterioration in the fleet utilisation trend - the proportion reporting increases in fleet usage has fallen from 43.9% at the end of 2011 to just under 40% at the end of March. That remains a significant proportion seeing improvements, and the proportion seeing utilisation levels fall remains at a low level - around 20%.

In regional terms, Europe isn't so much twin-track as triple-track, with Russia adding a positive Eastern element to the continuing North-South divide. The North-South variability in confidence remains pronounced: the survey shows that there are absolutely no signs of improvement in Spain and Italy has deteriorated for another quarter; in contrast, Nordic and multinational companies (which are mainly in northern Europe) are the best performers.

Russia seems to be the fastest growing rental market in Europe at the moment. It is the most optimistic market in terms of predictions of business levels 12 months from now, and is in the top two or three in every measure of business conditions in the survey - improving utilisation, higher investment levels and employment intentions.

It is also worth noting that multinational companies remain quite positive. They have seen the biggest positive jump in business opinion since the end of 2011 and they are in the top half of the league tables for investment plans and employment growth.

Alongside the multinationals it is companies in the Nordic region and Germany who are faring the best. In the case of Germany its modest position in the various tables - such as quarterly year-on-year growth and current business sentiment - has to be seen in the context of a much more positive market situation a year ago than many other countries in Europe.

In total, approximately 200 companies in Europe responded to the ERA/IRN RentalTracker survey for the first quarter of 2011. The survey was carried out at the end of March and beginning of April.

The full results will be published in the May-June issue of IRN, which will be published in the second week of May.

Our thanks to all the companies who responded and to the following organisations who helped distribute the survey to their members and contacts: Assodimi (Italy), ConfalQ (Spain), Construction Plant-hire Association (CPA) (UK), Consurent (Netherlands), DLR (France) and RusRental (Russia).

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