ERA Market Report 2018 reveals climate of confidence backed by increased investment and penetration in 15 major markets with growth forecast to continue
The European equipment rental market is growing ahead of the general economy, backed by increased investment from rental companies, but still shows significant opportunity, reports the ERA Market Report 2018.
The report, published today, is the leading source of market intelligence on the European equipment rental market and the only European-wide industry benchmark. It contains detailed market information for the years 2015 to 2020 and key indicators, including rental turnover, fleet value and investments.
For the first time, the report also provides an analysis on rental penetration based on equipment unit sales from a selected range of categories, alongside penetration rates by GDP and construction output. This new insight, conducted with Off-Highway Research, highlights the significant opportunity in less mature markets to grow common equipment rental categories.
The report shows that rental growth in the 15 major markets it investigates was 4.4% in 2017; an estimate for 2018 shows an increase of 3.7% and a forecast for 2019 of 3.4% – all at constant exchange rates. In 2017, the market for equipment rental without operators, for the EU-28 and European Free Trade Association, had a total turnover of EUR25.7bn with the 15 countries of the report accounting for more than 95% of sales. The sector is comprised of 17,100 rental companies employing more than 140,000 people.
Of the big 3 mature markets, France was the big winner in 2016 – 2017 with an increase of 7.8% in turnover to more than EUR4bn, driven by residential and infrastructure investments. Germany, which enjoyed a similar recovery in the previous year, grew 4.2% and is estimated to continue at 3.7% for 2017 – 2018. Only the UK, the biggest equipment rental market, worth EUR6.75bn in 2017, grew at just 1.4%, YOY ‘16/’17, held back by business uncertainty surrounding Brexit outcomes. The report estimates 2018 growth for the UK at 2.1% as negotiations continue; however, it remains the largest European market and investment is expected to have increased over 2018 by 7.9%.
As well as European-wide investment in fleet expansion and renewal, drivers for growth include an increasing recognition of the role of rental in ensuring sustainability and minimising environmental impact. Thanks to the new analysis in the special section about penetration, the ERA also highlights opportunity as the market gains traction, revealing a patchwork of penetration for a common equipment category such as a mini-excavator, from 85% of demand in the UK to less than 5% in a market such as Portugal.
Michel Petitjean, Secretary-General of the ERA said: “The market is maturing and growing which is encouraging. Businesses across Europe increasingly use rental as part of their competitive toolkit as it makes better use of capital, minimises environmental impact and provides access to new equipment and expertise, as well as ensuring compliance.
“The additional analysis this year on penetration rates for different common categories across Europe points to further growth opportunities for an exciting, modern industry, also both political and economic prospects only show short term trends leaving uncertainty after 2019.”