Rental Tracker: Q4 2024

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.‎