European rental confidence deteriorates in second quarter

By Murray Pollok16 July 2012

Rental industry confidence levels in Europe fell significantly in the second quarter of the year, with all areas except Germany, the Nordic region and Russia reporting worsening conditions.

The latest ERA/IRN RentalTracker quarterly survey - a joint venture between the European Rental Association (ERA) and International Rental News (IRN) magazine - found that 35% of the 220 respondents were seeing worsening conditions while just 17% reported improvements.

This corresponds to a negative balance of opinion of -17.5% compared to a positive +7.2% balance in the first quarter of the year. It is the worst negative balance for three years.

Only Russia saw a positive balance (+10%), with Germany and the Nordic region seeing no change from the previous quarter. Rental companies in the UK/Ireland, multinationals, Benelux, France, Spain and Italy reported worsening levels of activity.

The continued high level of uncertainty surrounding the Eurozone sovereign debt crisis is reflected also in companies' expectations for business levels a year from now, with a fall from 51% to 34% in the proportion expecting better conditions.

The proportion expecting worse conditions a year from now has increased from 20% in the first quarter of 2012 to 26% in the most recent quarter, with the positive balance of opinion of +8.4% at the end of June being the lowest level ever recorded in the survey.

The results show that confidence and business sentiment are being shaken, but they do not yet indicate significant deteriorations in actual business levels. Year-on-year comparisons of rental business activity in the second quarter shows that the proportion seeing increased activity has stayed level with the previous quarter at around 40%, with the positive balance of opinion actually rising a little to +13.9% (up from 11.1% in the first quarter).

Year-on-year comparisons will continue to become more challenging because the high percentage increases in 2011 related to still depressed business levels in 2010.

With fleet time utilisation, the survey shows that although there is still a positive balance of opinion (+7.3%, corresponding to 31% reporting an improvement and 24% reporting a deterioration), this is less than the first quarter of the year and is the fifth consecutive quarterly decrease. In other words, utilisation rates continue to strengthen, but at an increasingly slower rate.

Many companies still plan to spend more on their fleets this year than last, although the proportion expecting to increase investment by more than 10% this year has slipped from 35% at the end of March to 27% at the end of June. Russian renters remain the most likely to invest significantly more this year (53%), while it is companies in Germany, the Nordic region and France who have downgraded their investment plans the most.

The same picture is evident for projected CapEx levels in 2013, with the proportion anticipating an increase in spending of a least 10% falling from 38% in March to 32% in June. Companies in Russia and multinationals are the most likely to increase spending, as was the case at the end of the first quarter.

In total, approximately 220 companies in Europe responded to the ERA/IRN RentalTracker survey for the second quarter of 2012. The survey was carried out at the end of June and beginning of July.

The full results will be published in the September-October issue of IRN, which will be published at the start of November.

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

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, Access, Lift & Handlers Newsletter features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Featured Training From Easybook
NYC SST Online Training

The clock is ticking… Construction workers in New York City – have you fulfilled your required Site Safety Training (SST)? Get your SST card online now

Latest Events
ALH Conference program announced
The full ALH Conference program has been announced for the Sept. 14 rental and access event in Chicago
Registration open for ALH Conference
Registration is now open for the ALH Conference set for Sept. 14 in Chicago with presentations to be given by Larry Silber, Matthew Elvin, Rob Messina and more
Full ALH Conference speaker lineup announced
Larry Silber, Herc Rentals CEO, to give keynote at this year’s ALH Conference on September 14
Off-Highway Research

The gold standard in market research

Off-Highway Research offers a library of more than 200 regularly updated reports, providing forensic detail on key aspects of the construction equipment industry.

Our detailed insights and expert analyses are used by over 500 of the world’s largest and most successful suppliers, manufacturers and distributers, to inform their strategic plans and deliver profitable growth.

Click here to visit our website

CONNECT WITH THE TEAM
Lindsey Anderson Editor, Access, Lift & Handlers Tel: +1 312 929 4409 E-mail: lindsey.anderson@khl.com
Tony Radke Sales Manager Tel: +1 480 478 6302 E-mail: tony.radke@khl.com
CONNECT WITH SOCIAL MEDIA