Rental growth update during ERA rental week webinar
16 October 2023
Equipment rental markets in Europe are expected to slowdown in 2023 and 2024, according to S&P Global, with the growth that does take place related to increased rental prices rather than greater activity.
Sevra Rende, associate director at S&P Global Market Intelligence, speaking at the European Rental Association (ERA) webinar streamed from a Loxam depot in Paris last week, said the rental market was facing a mixed business environment, with slower economic growth and tighter monetary policy impacting on economic activity.
“In 2024, France, Germany and the UK rental market will struggle as the lagged impact of tighter monetary conditions continue to impact affordability”, said Rende, who was giving some advance information on the latest ERA Rental Market report, which will be published soon.
“Housebuilding in Germany recorded sharp declines, for example, while the growth in Nordic countries is going to be supported by increased demand coming from industry, especially investments in green projects, which are going to offset in the short to medium-term the decline in the housing market.”
She said Europe’s two largest rental markets, Germany and the UK, would not be buoyant in 2024; “Although both economies are struggling in 2023 and 2024, they are expected to keep their position, while we expect Italy and Spain to move up by 2024.”
Rende said Italy and France will benefit from construction renovation projects, while Spain will grow because of the roll-out of the EU Recovery and Resilience Facility.
She added that rental growth was expected to be moderate this year “and mostly the positive growth here is attributed to increased prices rather than significant improvement in activity.
“Also, some economies are benefiting from renovation projects and increased penetration rates, while economic uncertainty is also benefiting rental as more people are choosing to rent rather than buy machinery.”
The ERA webinar, which was opened by Stéphane Hénon, president of the ERA and managing director of Loxam, was focused on the issue of investing in people.
Hénon said he was proud that the European Rental Week had taken place less than a year after the idea was suggested by ERA’s National Association and Promotion Committeess; “I’d like to thank all their members for this brilliant idea, for their tenacity and strength of conviction in taking it forward.
“European Rental Week is an annual event dedicated to the promotion of rental across Europe. It aims to coordinate promotional activities from rental companies and rental associations to improve the attractiveness of our industry, to raise awareness of the rental concept and promote rental as a sustainable, cost effective and resource efficient solution.
He said rental was a above all a people industry; “Without our people, we wouldn’t deliver any services to our customers and the challenges of attracting recruiting and retaining people are common to us all. This was confirmed during the strategic review that the ERA board carried out in January.”
ERA’s three-year plan has three pillars, said Hénon; “First, sustainability, by reducing the environmental impact. Second, people – attracting, recruiting and retaining, with a special focus on health and safety. And last, finance, aiming to safeguard the profitability of the rental industry.”