World Rental Report: how big is the global rental market?

28 September 2010

The fastest growing rental companies from the IRN100 survey for 2009.

The fastest growing rental companies from the IRN100 survey for 2009.

How big is the global rental industry? Murray Pollok scans the available sources to provide a snapshot of the 2009 rental market and reports on some forecasts for Europe and North America.

It is ironic - if understandable - that the best quality rental statistics are available for the worst performing markets, while data on the world's high growth markets is extremely hard to get.

This means that we can say with some certainty just how badly rental performed in North America and Europe last year, while the true extent of growth in markets like Brazil, Hong Kong or Saudi Arabia remains cloudy.

That said, we have tried to compile data on as many rental markets as possible (see the tables of figures on these pages), although we have resisted the temptation to calculate a global rental market figure this year. This is because the figures we give on these pages are not all measured in the same way (the European Rental Association figures, for example, do not include party and events and are only for non-operated plant) and because the figures for markets including South America, the Middle East and Asia Pacific are very broad estimates for which there cannot be a high degree of confidence.

Let's look at the developed markets first. In figures released in December last year, the American Rental Association and its consultant, IHS Global Insight, said the US rental market peaked at over US$36 billion in 2007 and 2008 before falling back to around $30 billion in 2009. At that time it was forecasting a further fall this year to around $27.5 billion.

As we show on Figure 1, however, the ARA is forecasting a modest return to growth next year before accelerating away in 2012. It is expecting total revenues in the US to exceed the 2007 peak by 2014.

This growth is reflected also in the ARA's projections for growth in Capital Expenditure (on construction and industrial equipment) - shown on Graph 2 - with CapEx remaining stable this year before starting to increase in 2011, again accelerating again through to 2014, by which time ARA expects it to reach $11 billion, which is higher than the £10 billion invested in 2006.

These predictions are rather bullish, and it will be interesting to see how ARA/IHS Global Insight revises these figures later this year. Scott Hazelton, IHS Global Insight's director, business planning solutions, told the ARA recently that he expected rental recovery to be weak as economic growth slows in the US.

It is worth noting also the importance of aerial platforms to the overall health of the rental sector, with many big rental companies heavily reliant on access equipment (over 50% of revenues in many cases). Recent IPAF research, carried out by Ducker Worldwide, forecasts that AWP rental revenues in the US fell by almost 25% in 2009 and were likely to be flat this year before rebounding with a 10% increase in 2011.

Meanwhile, ARA's counterpart in Europe, the European Rental Association (ERA), remains cautious on prospects for rental growth. The ERA's 2009 Rental Market Report (also produced by IHS Global Insight) estimates the total European market (excluding Russia) at €20.2 billion, a decrease of 17.2% from the 2008 figures. ERA only considers non-operated plant in its estimates.

The ERA forecasts that rental revenues in 2010 will decrease between 0% and 5% (with the exception of Spain where a 20% fall is forecast). ERA says growth of between 0% and 10% is likely in 2011.

Aerial platforms are also 8importrant in Europe, and here, IPAF/Ducker Worldwide research indicates that after a 10% fall in rental revenues last year, the sector will see slight growth this year and then +5% increases in 2011.

Outside of North America and Europe the largest rental markets are in Japan and Australia. The Japanese Ministry of Economy, Trade and Industry estimates that the Japanese rental market is a Y1200 billion (€10.7 billion) market, while Australia's rental market is estimated at around A$3.5 billion (€2.5 billion). In both cases, the last year and a half has seen a slowdown of rental activity, although not to the same extent as in the US or Europe.

Much more dynamic at the moment are the rental markets in Latin America and parts of Asia, including India and China.

Brazil in particular is fast growing, with Mills and Solaris posting, respectively, 35% and 15% growth last year - making them two of the top three fastest growing companies in this year's IRN100 listing.

Rental markets in Chile and Peru are currently buoyant, with Argentina's rental sector seeing more moderate growth. Elsewhere in the region, big infrastructure programme are seeing rental growth in Mexico and Panama, even if Mexico's economy is currently suffering because of its links to the slow US economy. Spanish rental company GAM is forecasting that it will almost double its revenues in Latin America over the coming year.

The Middle East market remains an attractive prospect for rental companies in Europe, although the rather severe crash in Dubai has yet to be reversed. Instead, the rental focus has shifted to other markets such as Qatar and, in particular, Saudi Arabia, where there are massive oil and gas and petrochemical investments planned, as well as major infrastructure projects.

Asian rental markets have generally started to grow rapidly again following a slowdown in the rate of expansion in 2009. One Hong Kong renter tells IRN that the market has started to expand again after several flat years and that the rental market looks very promising up until 2012.

Singapore saw a significant slowdown in rentals this year following the completion of several major hotel/casino projects. However, one renter in the country told IRN that oil and gas and petrochemical projects in Jurong Island would promote further rental demand.

Other notable Asian markets include China (on which we have written recently - see the July-August issue of IRN) and Vietnam. Vietnam is one of the fastest growing construction markets in the world, with an US$18 billion infrastructure investment plan in place and 25% construction growth in the first seven months of this year alone.

It is safe to say that rental companies in North America and Europe would be extremely happy with growth a lot lower than that.

Worldwide Rental Revenues in 2009


UK €5.02 bn
France €3.14 bn
Germany €3.12 bn
Spain €1.75 bn
Italy €1.44 bn
Sweden €1.08 bn
Netherlands €1.12 bn
Norway €0.66 bn
Denmark €0.43 bn
Belgium/Lux €0.41 bn
Finland €0.32 bn
Other EU-27/EFTA €1.73 bn
SUB-TOTAL €20.2 bn

Russia €0.5 bn

TOTAL €20.7 bn

Note: Figures exclude operated plant and party/events. Russian figure from MS Consulting, Moscow, includes operated plant.

North America

US US$30.0 bn
Canada US$3.0 bn
TOTAL US$33.0 bn

Rest of the World

Japan €10.7 bn (Y1200 bn)
Australia/New Zealand €2.5 bn (A$3.5 billion)
Asia Pacific <€750 m
Latin America <€500 m
Africa <€450 m
Middle East <€300 m
India <€200 m
TOTAL (Estimate) ~€12-15.0 bn

Market Share Estimates - 2009

Europe Top 10
Loxam - 3.2%
Ramirent - 2.5%
Algeco Scotsman - 2.4%
Cramo - 2.2%
Speedy Hire - 1.9%
Liebherr Mietpartner - 1.4%
GAM - 1.4%
Mediaco - 1.3%
Harsco Infrastructure - 1.3%
Kiloutou - 1.3%
Top 10 Share - 18.9%

North America Top 10
United Rentals - 9.0%
RSC Equipment - 6.3%
Sunbelt Rentals - 5.5%
Hertz - 5.1%
Home Depot - 2.6%
Williams Scotsman - 2.3%
AMECO - 2.1%
NES Rentals - 1.7%
Mobile Mini - 1.6%
Maxim - 1.4%
Top 10 Share - 37.6%

Sources: American Rental Association, European Rental Association, RentalInsight (Daniel Kaplan/Yengst Assoc), International Rental News, MS Consulting (Moscow).

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