The latest ERA/IRN RentalTracker suggests that business sentiment across Europe’s rental industry has taken a step back from the modest positivity at the end of last year. While not a collapse by any means, signs of strain are emerging.
The Q2 2025 survey, conducted during June and early July, attracted responses from more than 110 rental businesses across the region. These reveal a mixed picture: 23% of companies reported improved market conditions, while 33% say conditions are worse. With 44% indicating no change, the result is a negative balance of opinion of -10%, marking a downturn from the +10% balance recorded in Q4 2024. This shift reflects ongoing pressure from high interest rates and sluggish construction activity in several countries.
On the positive side of the coin, the number of companies expecting business to improve within 12 months has risen to 42%, with just 19% forecasting deterioration, giving a strong balance of opinion of +23%. That’s slightly down from +30% in the Q4 2024 survey, but still represents a confident outlook from much of the industry. This “forward-looking optimism” has become something of a theme in recent surveys. While companies are under pressure now, many expect, or hope for recovery by mid-2026. This sentiment is also reflected in year-on-year comparisons. When asked about Q2 2025 activity levels versus the same period in 2024, 27% of respondents reported higher levels, while 22% said activity was down. The resulting +5% balance, though modest, suggests some resilience in core rental demand despite broader economic headwinds.
Utilisation and CapEx
Utilisation — the metric that reflects how much of a fleet is actively being used — has remained relatively stable across Europe.
Overall, 31% of respondents reported increased utilisation in Q2 2025, compared to 22% who reported a decline. That gives a positive balance of +9%, consistent with the same figure recorded in Q4 2024. The strongest utilisation figures once again come from Spain, where 85% of companies reported an increase. However, a lower number of responses here means this should be taken as anecdotal. Italy follows with 43%, and Germany also posted a positive trend with 27% noting rising utilisation, a substantial improvement from just 7% one year ago. France (26%) and the UK & Ireland (15%) showed weaker numbers, with the latter seeing a decline from 21% last year. Multinational firms reported a utilisation increase of 33%, suggesting that larger companies may be benefiting from greater flexibility across markets. As for CapEx, although the appetite for fleet investment has not disappeared entirely, it has become more selective and uneven. 10% of companies expect to increase fleet spending in 2026. Yet, with almost as many planning to hold back or reduce expenditure, this points to a cautious approach in the face of economic uncertainties. Italy and multinationals lead the way on investment intentions, with 50% of respondents planning to increase spend next year. Germany, which had recorded only 8% positive CapEx sentiment in the last survey, has now rebounded to 38%, suggesting that the market may be slowly regaining confidence. Spain, by contrast, shows a marked drop, with only 38% expecting to invest more, compared to 66% in the previous year. This could be a sign that Spanish rental firms, after a period of strong growth, are beginning to consolidate rather than expand. France remains at the bottom of the investment chart, with just 13% of companies indicating they will increase spending — a marginal increase from 10% but still very low by historical standards. These figures suggest that while some companies are continuing to invest in fleet renewal or electrification, many are holding off on major commitments until clearer market signals emerge. Employment plans offer some grounds for caution. 30% of respondents across Europe anticipate expanding their workforce by Q4 2025, a modest decline from 39% last year.
Geographical breakdown
Zooming in at a country level reveals significant differences in sentiment across Europe. Once again, Spain stands out for its confidence and strong growth indicators. At the end of Q2 2025, 87% of Spanish respondents reported improving market conditions, up from 69% in the same quarter last year. It also tops the charts for year-on-year growth (87%) and utilisation (85%).
While sentiment remains lower overall, 42% of respondents in Italy reported growth versus Q2 2024 (up from 29%), and 30% said market conditions had improved. This is a positive shift, even if tempered by ongoing market uncertainty. In the UK and Ireland, the picture is more restrained. Only 27% reported improving conditions (a slight increase from 24% last year), while 33% reported growth year on year. Germany shows modest improvement compared to last year’s numbers, but remains subdued. Just 20% report improved conditions, up from 6% last year. Quarter-on-quarter growth was noted by 22%, also a rise from 6%, but still below the European average. France continues to post the weakest scores of any major market. Just 5% of respondents said they were experiencing improving conditions — a marginal increase from zero in Q4 2024. Only 26% saw year-on-year growth, and just 13% intend to increase investment in 2026, suggesting a sector still under significant strain. Multinational companies recorded more conservative sentiment overall, with only 8% reporting year-on-year growth and 36% citing better current conditions. However, expectations for 2026 investment and hiring remain stronger than those of many single-country operators.
Food for thought
So, the results of the Q2 2025 ERA/IRN RentalTracker paint a picture of a sector navigating uncertainty with a combination of pragmatism and forward-looking optimism. The balance of sentiment has clearly slipped compared to the end of 2024, but expectations for recovery remain intact in many areas. Utilisation levels are encouraging and serve as a reminder that core rental demand has not evaporated, even if conditions are not yet strong enough to drive universal confidence.
As ever, the industry seems to be keeping one eye on present pressures and the other on future opportunities.
Year from now
Utilisation
Q vs Q
Investment 26
Employment
Conditions now
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More than 120 companies took part in the ERA/IRN RentalTracker survey for the fourth quarter of 2024. Lewis Tyler analyses the key findings. Business sentiment among equipment rental companies in Europe is continuing to decline, albeit with no sign of a collapse. This is a key finding from the Q4 2024 ERA/IRN RentalTracker, conducted from mid-December to early-January.
The survey, which received more than 120 responses, revealed that one in five companies (20%) reported a worsening of business conditions now, although 20% said that conditions are improving, resulting in an even balance of opinion. With 60% of companies reporting stable conditions, there seems to be reasons for cautious optimism. However, comparing responses in the second quarter of 2024, when the balance of opinion was +10%, indicates a slight deterioration in confidence. Low construction activity and high interest rates are affecting business conditions across various regions in Europe, with some companies particularly feeling the pressure, it seems.
The survey does reveal some optimistic sentiments. For example, there was a +6% balance of opinion on Q4 market activity compared to the same period in 2023. That compares to a negative balance of opinion of -1.9% for the second quarter of 2024. Not a massive swing in sentiment, but a sign that there is hope for the future. For Q4, 31% reported higher activity than the same quarter in 2023, while 25% said activity was lower. A trend in recent surveys has been one in which responses reveal an industry looking to the future for some form of positivity, and that is what we find here. In the ‘expectations for a year from now’ metric, 41% said they expect conditions to be better in a year, 48% said they expect no change and just 11% predicted worse conditions, giving a +30% balance.
CapEx and utilisation
Capital expenditure has been historically high post-pandemic. However, given the current economic climate and weak construction market in some regions it should come as no surprise that companies are expecting to tighten spend this year. In that respect, there is what can only be described as a significant shift, with just 23% of companies expecting to increase fleet CapEx in 2025, the exact same as those expecting to decrease spending. So, on the face of it the balance of opinion is even, but when comparing the results to the previous survey which was +24%, it is a big drop.
As for employment intentions, 97% of responses said they intend to either recruit more or maintain staff levels in the coming months, with just 3% looking to reduce workforces. That results in a positive balance of opinion of +33%, but given the skills shortages in Europe and ongoing issues with recruiting and retaining staff, this is probably not a surprise. How about fleet utilisation levels in the final quarter of 2024? This metric has fluctuated for some time but largely stayed positive since the pandemic. That is exactly what we find here. The 27% noting increasing utilisation levels versus the 18% reporting a decrease is enough to see a 9% balance of opinion. Add the 27% to the 55% that said utilisation was stable and the result is even more positive, with more than three quarters seeing at least stability.
Regional focus
Looking at the results from a geographical perspective, the table gives a detailed overview of sentiment across Europe. It’s start with the positives. Spain has been one of the strongest markets in terms of RentalTracker sentiment, and this has continued in the Q4 survey, even if the relatively small number of respondents mean that results should be viewed as anecdotal rather than conclusive.
69% of respondents from Spain said they are experiencing improving market conditions (up from 67% in Q2 of 2024), while 36% said they expect conditions to be better in 12 months’ time (up from 18% in Q2 of 2024).
As well as being the only country to be above the European average in each metric, Spain also comes out on top of the countries expecting to employ more (55%), reporting higher fleet utilisation (66%) and anticipating higher investment (66%). Perhaps the most notable response was the 73% that reported quarter on quarter growth. On the other side of the coin, not one survey respondent from France said they were experiencing improving current conditions. Again, a low pool of responses renders this anecdotal, but a pattern is certainly emerging given that French rental and distributors association DLR’s market barometer for Q3 of 2024 revealed that its members “remain concerned about the sector’s future.” There was a good level of response from Germany, but unfortunately the findings don’t make for great reading.
In fact, Germany comes bottom of all but two metrics, conditions now and business levels for the year ahead (Italy comes bottom here with only 21% of responses expecting business to improve in 12 months’ time). Just 6% of German respondents said conditions were improving in Q4 last year, the same number that reported quarter on quarter growth. Perhaps the most eye-catching statistic is that of CapEx, with just 8% of responses from Germany expecting to increase spend (down from 45% last time out) and 46% expecting that to drop in the future, giving a balance of opinion of -38%.
It is a mixed bag from Italy, where there is a drop in sentiment across many metrics, but an increase in positivity in employment intentions (36% will employ more in the first quarter of 2025) and Q4 quarter activity compared to 2023 (29% said Q4 2024 growth vs Q4 2023 had increased). Looking ahead, 56% of companies in the UK and Ireland expect conditions to be much better this time next year.Sentiment for current conditions in the UK and Ireland is down, with 24% of companies experiencing improving market conditions at the end of Q4 (compared to 50% in Q2 of 2024). However, it is above the European average for CapEx, with 47% expecting to increase fleet spend this year.
Recent RentalTracker surveys pointed towards an industry waiting for better times; the Q4 results suggest that the waiting may go on.
Notes:
1. The full report, with more data, will be published in the January-February issue of International Rental News.
2. The survey was conducted in December 2024 and the first two weeks of January 2025, with more than 120 companies in Europe taking part. IRN would like to thank ERA and national rental associations in Europe for their help in distributing the survey.
Conditions now
Utilisation
Forecast
Quarter on quarter
CapEx this year
Employment
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]]>The European Rental Association (ERA) has kicked off a project on Energy Transition in the Rental Industry. The project marks a significant step toward advancing decarbonisation of the rental industry and related value chain. This initiative comes at a critical time when transitioning to low-carbon solutions is essential for long-term growth and environmental stewardship. By bringing together various stakeholders, ERA aims to develop a cohesive handbook offering numerous strategies to face existing challenges with the process of the energy transition towards electrification and alternative fuels solutions.
The Importance and Challenges of Energy Transition
The process if the energy transition in the rental and by extension the construction industry has been ongoing gradually for several years. The process is fuelled by the need for decarbonisation of the industry, increasing pressure from regulations and from customers on sustainability and the overall shift to modern equipment that is required to have many digital capabilities.
However, the rental industry faces significant structural challenges as it moves towards low and zero emissions equipment. These challenges include limited availability of alternative fuels and fuelling and charging infrastructure, fragmented landscape of charging solutions, limited availability and a price of low emissions equipment, cultural and technical reticence of rental customers to embrace low emission equipment, as well as the complex considerations of total cost of ownership of equipment. To address these issues, ERA contracted EY, the renowed consultancy, to engage all stakeholders—OEMs, rental companies, customers, users, and public authorities in a truly collaborative study.
Deliverables of the project
The Energy Transition Project is built around four essential objectives, offering a comprehensive roadmap:
- On standardisation, the study will summarize current trends in batteries and infrastructure to articulate the rental industry standards needs and identity training needs of rental companies in this area. This part will also deliver recommendation to equipment manufacturers and to public authorities on standardisation actions.
- Guidance on energies will summarize the range of alternative energy options and will identify the most appropriate type of energy in a piece of equipment and the barriers to the alternative types of energy adoption. A separate note on the taxation of fuels, incentives and subsidies will be developed in this part of the project.
- A report on customer requirements and customer value proposition will detail the challenges and opportunities of the energy transition from the customers’ point of view. It will give recommendations to improve the accessibility and attractiveness of low carbon solutions for the customers. It will also identify new business opportunities for rental companies related to electrification of equipment and alternative energies.
- Revision of the rental total cost of ownership model will update the existing TCO model with energy related considerations, based on the conclusions of the first three phases.
Looking Ahead
While the journey of the energy transition towards decarbonisation is a one that the industry inevitably needs to take, with the initiation of the ERA project, it is becoming apparent that there are many ways different and nuanced ways to get there. For example, electronification of equipment is one of them, but using alternative low emission fuels such as HVO in improved internal combustion engines will continue to be a solution where electrification is not a feasible option.
The ERA project on Energy Transition will guide all stakeholders in the rental value chain through this process. ERA expects to the all deliverables of the project will be available by mid 2025.
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]]>The European Rental Week is taking place from 14 to 20 October, focusing onthe theme “Working in Rental for a Sustainable Future” and the 3 pillars; People, Rental Solutions, and Sustainability. European Rental Week was developed in collaboration with the National Association and Promotion Committees of ERA. Activities within different countries will be coordinated and promoted by the national associations within the European Rental Week framework.
Michel Petitjean, Secretary General of ERA, said:
“As we celebrate the second year of European Rental Week, we are extremely proud to focus on the critical contributions of sustainability, people, and rental solutions to the ongoing growth and transformation of our industry. European Rental Week provides an excellent platform for us to engage with our members, partners, and the wider community to discuss these key themes and to highlight the immense value that rental solutions offer across various industries. By working together, we can continue to elevate the visibility of the rental industry and showcase the essential role it plays in building a more sustainable future.”
Join Working in Rental for a Sustainable Future Webinar, 14 October 2024
We are excited to announce the Working in Rental for a Sustainable Future Webinar, which will take place on October 14, 2024, from 14:00 to 15:00(CET). This engaging webinar will bring together industry leaders and experts to discuss the critical issues that shape the future of the equipment rental industry in Europe, with a special focus on sustainability, rental solutions, and the importance of people in driving the sector forward.
Member Activities during the European Rental Week
As ERA, we have invited all our members to actively participate in this celebration. With events, social media campaigns, field activities, sector ambassadors, and the dedicated work of our committees, we are set to make this week truly impactful. You can access all the activities through the European Rental Week website.
About ERA:
The European Rental Association was created in 2006 to represent national rental associations and equipment rental companies in Europe. Today, the membership includes rental companies, and rental associations, as well as equipment manufacturers and other suppliers to the rental industry. ERA is active through its committees in the fields of Promotion, Sustainability, Statistics and Technical, and through its working groups, including the Future Group and the OSH Working Group. Extensive information on ERA’s activities, reports, and publications is available on the ERA website at https://erarental.org/ .
Contact: Rabia Ozdemir, Communications Manager, ERA, [email protected]
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]]>The post The European Rental Association (ERA) has released its 2024 Market Report appeared first on ERA.
]]>According to the report, the European rental market is projected to grow by 0.9% in 2024, 2.8% in 2025, and 3.6% in 2026, reflecting steady growth in the industry.
The European rental market has experienced a steady increase in its rental penetration rate over the past years, reflecting the growing preference of customers to rent rather than buy equipment and tools. Renting offers access to modern equipment, flexibility, and cost-efficiency, as it reduces capital expenditure requirements, fixed costs of ownership, and residual value risk while allowing customers to adapt to changing demand and project requirements.
In the report, the data from Y-2 Eurostat data (i.e. from two years before this report’s publication, as available in Eurostat) on annual turnover for 3 NACE codes (rev. 2) is used. Forecasts of economic and construction activities are taken from the European Commission (including the European Construction Sector Observatory – ECSO – and the Building Stock Observatory – BSO), FIEC (European Construction Industry Federation), Euroconstruct, S&P Global, and KPMG proprietary data.
For ERA members*, the ERA Market Report is available this year for free to provide more visibility for the industry. It is also available for non-members for a fee of EUR 1,200.
If you would like to access the report, please email the ERA team at [email protected].
*Incl. rental company members of associations that are a member of ERA.
**Ends**
About ERA:
The European Rental Association was created in 2006 to represent national rental associations and equipment rental companies in Europe. Today, the membership includes rental companies, and rental associations, as well as equipment manufacturers and other suppliers to the rental industry. ERA is active through its committees in the fields of Promotion, Sustainability, Statistics and Technical, and through its working groups, including the Future Group and the OSH Working Group. Extensive information on ERA’s activities, reports, and publications is available on the ERA website at https://erarental.org/.
Contact: Rabia Ozdemir, Communications Manager, ERA, [email protected]
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]]>How is sentiment among rental companies in Europe holding up? IRN Editor Lewis Tyler reports on the ERA/IRN RentalTracker survey for the second quarter of 2024.
If responses to the ERA/IRN RentalTracker for the first quarter of 2024 exposed some apprehension for the present, the survey for the second quarter will do little to ease those concerns.
The general view of the industry largely remains stable, but with continuing caution on capital investment and mild hopes for a better 2025.
As such, the Q2 2024 ERA/IRN RentalTracker, carried out between mid-June and early July, reveals a continuing shift in sentiment for companies looking ahead just as much as they are focusing on the present.
Looking at responses for forecasts for a year from now, there is a +39 positive balance of opinion (the difference between the proportions with positive and negative views), with just 14% of responses predicting worse conditions next year and 53% predicting an improvement.
That’s similar to the end of Q1 this year and certainly better (mostly) than in 2022 and 2023.
Companies in the Benelux region come out on top in this metric, with 71% of responses expecting to be better off in 12 months’ time.
The Nordics (64%) and multinational companies (58%) also come off well, although sentiment among the latter has dropped off in recent months.
At the other end of the spectrum, companies in France (21%) and Spain (18%) continue to see a deterioration, although in the case of Spain, that is in a context of consistently positive sentiment for some time, so a falling off of expectations for 2025 might be expected.
Focusing on the here and now, more specifically current conditions, there is a very slight drop in the balance of opinion from the first quarter of companies reporting better business conditions, although opinion has become more polarised: 40% reported improving conditions while 29% are seeing a worsening environment. The proportion seeing ‘no change’ was 31%, which compares to 42% at the end of the first quarter this year.
It’s worth pointing out that the number of positive responses is the highest for two years.
The survey does hold some positives for current market conditions. Spain has the highest number of ‘improving’ responses at 67%, while data for the Nordics (55%), Multinationals (47%), Benelux (43%) and France (32%) all show improvements on the first quarter.
Companies in Italy (30%) and the UK & Ireland (20%) are least positive on current business conditions
By contrast, Germany is the country that posts the largest decrease in positive sentiment from Q1, shifting from 36% to just 24%.
The Benelux features among the top in positivity in growth for the second quarter, as it does with current sentiment.
When compared with the same period last year, 50% of responses from companies in the region said conditions have improved, although it should be noted that in our last survey this figure was 76%.
There’s also room for positivity among companies in France and multinational companies. However, the picture is less positive for companies in the Nordics, Germany, Italy and the UK & Ireland.
Our data for Germany shows only 13% companies there reported higher activity in Q2 this year compared to the same period last year..
Looking at expectations for the full year 2024 compared with 2023, although there is a positive balance of opinion of 20%, this is down from 32% at the end of Q1 – clearly sentiment surrounding the current year has dropped.
You have to go back to the second quarter of 2023 to see it as low. In fact, since the first quarter of 2021 – when post-Covid recovery was dominating – that metric has largely stayed above 50%.
Elsewhere, the balance of opinion on fleet investment for this year is still negative (-2%) – in other words, those expecting to spend more are balanced out by those spending less. Even so, just 30% will spend less in 2024 and 70% will maintain or increase their spending from 2023 levels, which is not a bad result.
Looking at expectations on fleet spending for next year, while sentiment has softened a bit from the Q1, there is still a healthy +24% balance of opinion.
Some 84% of respondents will maintain or increase spending next year and just 16% expect investment to fall.
The survey also reveals a very slight deterioration of utilisation levels on Q1, with a +10% balance of opinion among respondents, down from +16% on Q1 but still an improvement on the 4% seen at the end of 2023.
In the utilisation metric, Italy leads the way with 60% reporting an improvement, although that should be viewed as anecdotal, given the relatively modest number of responses we had from Italy.
There will be little overall change in what companies were reporting on utilisation rates in Q2, although it is notable that companies in Germany and also multinational players were less positive about utilisation trends than in the first quarter.
Employment plans
How about employment intentions? It has been well documented that companies in Europe are struggling to fill skilled roles and retain staff, and that is seemingly backed up in the survey for intentions in the third quarter of 2024.
The balance of opinion here – the difference between the proportions who will increase or decrease recruitment – is +26%, down slightly from 29% in Q1.
Given the relatively modest business environment overall, there are still a lot of companies looking to recruit.
Companies in Spain, the Benelux and multinationals are the most likely to recruit more staff; those in France, the Nordics, Italy, Germany and the UK the least likely (but all still with a positive balance of opinion).
So, in the context of previous survey findings, the message from responses seems to be one of ‘wait it out’ and can be perhaps seen as a continuation of our previous survey, with some mixed messages (no great expectations for 2024, but cautious optimism for 2025).
It will be interesting to see if the positive sentiment on the future holds out into the final quarter of 2024 and first of 2025.
Notes:
- The full report, with more data, will be published in the July-August issue of International Rental News.
- The survey was conducted in the final half of of June 2024 and the first week of July 2024, with 123 companies in Europe taking part. IRN would like to thank ERA and national rental associations in Europe for their help in distributing the survey.
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]]>Brussels, Belgium — The European Rental Association (ERA) has today published comprehensive sectoral guidance for rental companies on reporting corporate carbon emissions across Scopes 1, 2, and 3. This document provides a standardized framework for the industry to establish an equipment rental company carbon footprint.
Measuring and reporting on carbon emissions are becoming key concerns as stakeholders, from clients and investors to regulators, are now demanding transparency, sustainability targets, and climate impact breakdowns. While the current landscape lacks a unified methodology for calculating the carbon footprint of equipment rental companies, compliance with the EU’s Corporate Sustainability Reporting Directive is imminent for larger companies operating in Europe. For small and medium rental companies this will become a point of attention in the medium term.
Michel Petitjean, Secretary General of the ERA, emphasized the global significance of the guidance, stating, “With this initiative we are taking a pioneering step to help equipment rental companies not only in Europe but worldwide, to accurately measure and report about their carbon footprint in a fair and harmonized way. Ultimately it will also allow to quantify the contribution of the equipment rental sector to the fight against climate change.”
Douglas McLuckie, Chair of the ERA Sustainability Committee, also highlighted the critical nature of the guidance for the sector, remarking, “The equipment rental industry plays a crucial role in the construction and other sectors, which is why it needs to be able to deliver the data on carbon footprint to the customers and public authorities alike. The ERA guidance will help rental companies to do that in a way that is transparent and agreed upon by the whole industry”.
Tailoring the GHG Protocol for the rental industry
Steered by the ERA Sustainability Committee and developed by KPMG, the global professional services firm, the guidance offers a step-by-step methodology for calculating corporate CO2 emissions in Scopes 1, 2, and 3. Drawing from the established GHG Protocol, this report tailors methodologies to specifically address the rental industry’s unique value chain. By aligning with the Greenhouse Gas Protocol, the ERA guidance ensures that users follow established standards while receiving sector-specific insights not available elsewhere. Whether a company is embarking on its carbon reporting journey or seeking to align with an industry best practice, this report provides concrete and actionable steps. It offers detailed guidance, data sources, and specific formulas for GHG emission calculations.
The guidance report delves into direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and all relevant categories of Scope 3. Special emphasis is placed on the most significant emission sources for the rental industry. The guidance offers tailored calculation formulas to quantify emissions while allowing flexibility to adapt to data availability.
The equipment database – a starting point for a common and consistent industry resource
The second pillar of ERA’s project introduces a valuable resource –the ERA rental equipment benchmark. As accurate emission estimation relies on specific equipment data, which today remains elusive, rental companies turn to approximations with a lack of relevant sources. The database addresses this matter by serving as a reference. It draws on industry-specific data provided by rental companies, OEMs, and lifecycle assessment analyses. Beyond carbon reporting, the database equips rental companies with a tool to respond to client inquiries about project-specific emissions. Utilizing this resource ensures consistency across the industry.
By embracing standardized methodologies and leveraging the equipment database, the industry can collectively advance toward its sustainability objectives. The guidance outlines clear methodologies for measuring and reporting emissions, encouraging consistency and comparability across the industry. It is designed to be accessible for all rental companies, regardless of size or experience with carbon accounting.
For more information, please contact: [email protected]
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]]>How is Europe’s rental sector performing at the start of 2024, and what is the feeling for the coming year? Murray Pollok reports on the findings of the ERA/IRN RentalTracker survey for the first quarter of 2024.
There is just enough positive news in the Q1 RentalTracker survey to justify our ‘Signs of life’ headline. Expectation levels for 12 months ahead are rising, and include a likely increase in fleet investment next year; time utilisation levels seemed to be shifting up year-on-year in the first quarter of the year; and current business conditions (at the end of March) showed an improvement on the two previous surveys in 2023.
There are some positive signs, then, but a fuller picture of the survey results would acknowledge that rental companies may be looking forward to 2025, but they still have the rest of 2024 to get through first. (The level of participation in the survey – 130 responses – was the highest since early 2021 and tells of an industry keenly interested in its current trajectory.)
Looking first at ‘business conditions now’, there was a positive balance of opinion of +12% (that is, the difference between the proportions experiencing positive (35%) and negative (23%) conditions). That is the first positive result since the Q1 survey in 2023, but still low in the context of the results from 2021 and 2022.
Spain, Germany and the Benelux were the most positive regions here, while there was insufficient data from the UK and Italy to say anything meaningful. French rental companies were the least likely to report any positive current trend, and multinational businesses were not far behind.
The survey was carried out by International Rental News (IRN) and the European Rental Association (ERA) at the end of March and the first week of April, 2024.
Fleet utilisation trend
The trend on utilisation levels seems to confirm the modestly positive finding on business conditions at the end of March, with a positive balance of opinion on utilisation rates of +16%. That reverses the very low level of sentiment at the end of 2023 and returns the trend to the positive levels seen in the Q1 and Q2 surveys in 2023.
Just 18% of respondents reported declining fleet utilisation at the end of March this year, compared to the 34% who were seeing an increase, with almost half seeing no change.
Companies in Spain and Benelux were the most upbeat here, with those in Germany, France and multinationals less so.
In terms of levels of business activity in the first three months of 2024, there was a +21% positive balance of opinion, which was almost identical to the findings in the Q2 and Q4 surveys from last year. Business is not growing rapidly, but it is growing.
The post-Covid period was hectic in growth terms, so the slow but positive findings from the Q1 survey points to something like a return to normal, although at a significantly lower level than seen in the years immediately before and after the pandemic.
Spain and the Benelux were again above the European average in terms of Q1 year-on-year activity, with Germany, Multinationals and France all in the lower half of the table. It was French companies, again, at the bottom of the sentiment league.
Investment plans for 2024/2025
The weak economic backdrop, not to mention the ongoing wars in Ukraine and Gaza, have led rental companies to be more cautious on their levels of investment. Asked about their likely fleet spending levels in 2024, there was a negative balance of opinion of -13%.
Around 80% of all respondents said spending would be the same or less as 2023. That sounds more negative that it actually is, because a large proportion, 43%, will maintain spending at 2023 levels and almost 22% will increase investment.
Still, for the first time since the start of the pandemic, more people say they will cut spending than increase it.
The sense that the industry is collectively waiting for 2025 is reinforced by the finding on forecast fleet spending next year, with a positive balance here of +39%. Fewer than 11% of respondents said they were likely to reduce investment in 2025. It seems it will be OEMs as well as rental companies looking forward to next year.
German and multinational companies were most likely to increase spending this year – both on small samples – but if the forecast intentions are acted on, then 2025 will see a big increase in investment by rental companies in France, Germany, the Benelux and by multinationals.
Recruiting intentions
Finally, we come to the employment intentions among rental companies. This measure would in normal times be a good reflection of business activity and forecast activity, but in today’s labour market, with companies finding it difficult to recruit staff, the findings are more complicated to read.
There is still a much larger proportion of businesses seeking to recruit more staff in the next quarter than reduce their headcounts, even in a period of economic uncertainty and generally lower investment levels. In France, for example, there is still a +35% positive balance of opinion on recruitment intentions, despite its more pessimistic findings elsewhere.
Overall, there is an almost +30% balance of opinion on recruitment intentions for Q2 2024, and it has remained at that level since the start of 2023. That reflects the challenges of finding and retaining staff, although on the plus side it represents a more stable situation that was facing the industry in the 2021 and 2022, when positive balances were frequently above 50%.
That recruitment and retention of staff is a key focus for rental companies can be seen also in the activities of the European Rental Association (ERA), with a new report and recommendations on the topic expected before the summer.
The start of 2024 finds the rental industry anticipating better times to come. They are not here quite yet.
Notes:
The full report, with more data, will be published in the March-April issue of International Rental News.
The survey was conducted in the final week of March 2024 and first week of April 2024, with 130 companies in Europe taking part. IRN would like to thank ERA and national rental associations in Europe for their help in distributing the survey.
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]]>More than 125 companies responded to the ERA/IRN RentalTracker survey for the final quarter of 2023. The noticeable deterioration in business sentiment in Europe’s equipment rental industry from the middle of 2023 continued through to the end of the year, although it is a far from dramatic decline.
In the Q4 ERA/IRN RentalTracker survey, undertaken at the end of December and start of January, almost a third of companies reported a deteriorating situation, with more than 40% seeing no change and 27% reporting improving conditions. That led to a negative balance of opinion of -5% (the difference between the proportions reporting positive and negative views), which is almost identical to the results of the Q2 survey at the end of June 2023.
We have to go back to the start of the pandemic in 2020 to find another period of negative opinion on ‘current conditions’. This relatively low level of confidence should not be surprising, given that the survey took place at a time of higher interest rates and near or actual recession in the Eurozone and the UK.
However, the worsening conditions are not yet having a powerful impact on business volumes. There is still a large +20% positive balance of opinion on business levels in the final quarter of 2023 compared to the same period in 2022.
That means 42% were reporting an improved quarter compared to a year ago against the 22% reporting a worse quarter. Although still positive, that is lower than all the surveys since the end of the pandemic and shows a slowing up of year-on-year growth trend since the end of 2020.
That context, of a slowing up of growth rather than a dramatic reversal, is supported by the results of the ‘full year’ levels of activity for 2023 against 2022. Here, 57% reported higher levels of activity, with 26% reporting no big change, and just 17% reporting a decline in activity for the full year. That resulted in a pretty remarkable +40% balance of opinion on overall 2023 activity levels.
Key rental metrics
What about the key business metrics of utilisation, fleet capital investment, and employment intentions?
On utilisation the downward trend which started in the Q4 survey in 2022 continued, although there remains a very small positive balance opinion, just +4%. More than 30% of companies reported improving fleet utilisation against 27% who said it was worsening. Some 43% said it was steady.
That means almost three quarters of respondents says utilisation was either steady or increasing, so a positive finding given the wider economic conditions.
You might expect that rental companies would soften their fleet investment plans in the face of slow economic growth, and that is indeed what we find, and it is a significant shift, with a negative balance of opinion of -15% (equating to 17% expecting to increase spending and 32% expecting a decrease). More than 50% said investment would be the same as 2023.
Remarkably, that’s the first time in 10 years that there has been a negative balance of opinion on this ‘next year CapEx’ question. (For readers wondering about the pandemic period: when the crisis hit, companies were expecting higher levels of spending in the following year, when they anticipated that the crisis would be over.)
Demand for employees
The employment question continues to be something of an exception to the broadly deteriorating trends, with many companies still trying hard to recruit staff. At the end of December, 92% of companies were either planning to maintain or increase their staffing levels and just 9% were expecting to reduce their workforces.
That meant a positive balance of opinion in favour of recruitment of +28%, which is high. Even here, though, there is evidence that sentiment is shifting down, with that figure being the lowest since the third quarter of 2020, during the pandemic. This positive balance has been steadily decreasing since hitting a high of more than +60% at the beginning or 2022.
When asked about their expectations a year ahead, there was no worsening in sentiment compared to the previous survey in June 2023, and there was actually a small increase in the positive balance of opinion to +22.5% (it was +19% in Q2 2023).
That is still rather low, historically speaking, but remains a positive finding. It might reflect a generally upbeat view among rental companies about the potential for rental to grow as an industry, but is also likely a reflection of the shallow nature of the current recession (or near recession), which could imply a relatively quick recovery next year.
Countries and regions
This survey we had a particularly strong response from companies in Spain and Germany. In the case of Spain, there was a much greater degree of positivity than elsewhere: the country was top of the league in five measures: expectations for 12 months ahead, current market conditions, Q4 growth year-on-year, utilisation trends and employment intentions. In that sense it is an ‘outlier’ in this survey.
Germany was top of the league in terms of expectations a year from now – possibly reflecting the view that ‘things must get better’ – but bottom in terms of CapEx expectations in 2024 and one of the lowest in sentiment on current market conditions at the end of Q4 last year.
Multinational companies were generally more positive than their national or regional competitors, and were, for example, the most likely to be increasing fleet investment in 2024. That will no doubt please the OEMs.
The number of responses from countries like the UK, Italy and France do not justify definitive judgements, but in all three cases business sentiment was not high among those who did respond. In most of the metrics, the three countries were in the lower half of the league table. Notably, they were the least optimistic that things would be better 12 months ahead, in all cases fewer than 30% of respondents expected an improvement by January 2025.
So, the Q4 ERA/IRN RentalTracker manages to reflect quite well a particular moment in Europe’s rental market: slower general economic conditions, deteriorating conditions in rental at the end of last year, and a softening of fleet investment plans for this year, but simultaneously with activity levels holding up rather well.
We will see in the Q1 2024 survey at the end of March if they continue to hold up.
Notes:
- The full report, with more data, will be published in the Jan-Feb issue of International Rental News.
- The survey was conducted in the final week of December 2023 and first week of January 2024, with 125 companies in Europe taking part. IRN would like to thank the rental associations in Europe, including ERA, DLR, ASEAMAC and Assodimi, for their help in distributing the survey.
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]]>Empowering the Industry: Rental companies’ involvement in ERA’s People, Attraction and Retention Survey
ERA has partnered with Eurogroup Consulting to conduct a comprehensive study addressing attraction and retention challenges in the equipment rental industry. Building on the success of ERA’s Convention on “Investing in People”, this study aims to provide valuable insights for rental companies, foster a more engaging work environment and enhance the industry’s overall appeal.
The invaluable perspectives of rental employees will play a vital role in shaping the outcomes of the report. For that reason, Eurogroup has prepared a survey that directly targets employees of rental companies in various roles and at different levels, and covers multiple aspects related to attractiveness and retention within the sector. This survey was sent to the rental associations and is now being sent to rental companies, whether they are members of ERA or not. ERA encourages all of them to actively participate in this survey.
The study’s findings will offer essential recommendations for rental companies to enhance their appeal and improve employee retention. This collaborative effort aims to create a more engaging and rewarding work environment within the rental industry, fostering its growth and sustainability.
This project is led by ERA’s Future Group and the progress is regularly reviewed during their meetings.
For more information or if you are a rental company and would like to be represented in the ERA Future Group, please email the ERA team at [email protected].
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