European rental market forecast for slow down in 2023

Photo: Adobe Stock/Sina Ettmer

The European Rental Association (ERA) is forecasting rental growth in Europe to see a slow down of 2.7% in 2023.

Its 2023 Market Report predicts a rental turnover of €29.7 billion and found that ‎higher borrowing costs and still elevated inflation are both impacting activity levels. 

Meanwhile, the report said high machinery ‎purchase prices and uncertainty about the economic environment is shifting demand to usership over ‎ownership.

For this reason, it predicts the rental market to outperform the construction sector this year.

The report also found that subdued eurozone economic growth, less favorable financing conditions, reduced business ‎confidence and inflation will also weigh on investment, with the residential sector to remain the main ‎drag on overall growth.

By contrast, infrastructure projects supported by the EU’s Recovery and ‎Resilience Fund should support the rental market going forward, while the diversification of the industry away from construction and investments in green projects will ‎benefit the sector growth in the long term. ‎

Elsewhere, there was a more positive outlook for 2022, with the European equipment rental market seeing a 7.5% increase in rental turnover, amounting to €28.9 billion across the 16 countries covered by the report.

Of the 16 countries, 14 grew by more than 5%, with Switzerland (1.2%) seeing the least growth and Portugal (18.2%) posting the highest. The UK, Germany and France remain the largest rental markets in Europe and now account for almost 69% of the total market size.

The report attributed the growth in 2022 to “increased prices rather than significant improvements in activity.”

Produced in collaboration with financial analysts S&P Global, the 2023 Market Report contains detailed market information for the years 2020 to 2025 and key indicators, including rental turnover, fleet value and investments.

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 €1,200

For more information email the ERA team at [email protected].