Updated rental forecasts show European construction equipment rental increasing with Italy catching up
According to a study by the European Rental Association (ERA) and the IHS Market, there has been an improvement in the forecasted growth of construction equipment rental from an estimated 0.90 % to 1.20 % for 2017 and 3 % to 3.50% for 2018.
During ERA’s Convention in Amsterdam, Michel Petitjean, Secretary General of the European Rental Association said:
“Things are better today than six months ago. We have a healthy change in our forecasts between September 2016 and April 2017.”
The study was conducted taking into consideration three fundamental parameters: construction activity, industrial activity and GDP.
The forecasts show four nations getting some traction : Germany, Poland, Sweden and the Netherlands.
Germany, thanks to an improvement in industrial activity, expects to grow between 1.20% and 2.70% in 2017 and between 2.40% and 3.30% in 2018.
Sweden’s growth is driven by construction activity. Poland is distinguished by good performance in all three indicators.
The estimates for the Netherlands show a healthy market growth of 4.1% in 2017 and 5.1% in 2018.
There is also positive news for Norway with a growth forecast of 4,30% in 2018.
Good news for Spain and Italy
There are very positive estimates for Spain and Italy too, where we see a recovery over other EU countries has been seen.
In Spain, the estimates are for 5.70% growth in 2017 and 6.10% in 2018. In Italy, growth will be around at 2% in 2017 and 3.40% in 2018.
UK forecasts have not improved compared to the previous years, but are still good at 2.20% growth for 2017 and 3.20% for 2018.
Improvement in the confidence
Data support a general sentiment of confidence of construction equipment rental operators and customers in Italy.
The April 2017 monthly survey, Rentalblog, shows that rental customers’ positive sentiments were up by 3 points from 116 to 119 being the highest levels ever recorded since 2006.
As evidence, the number of companies declaring the presence of significant obstacles to their construction activity is decreasing has decreased for the third consecutive quarter. The figure is now 57.9%
The average number of months of assured activity remains unchanged: 9.9 months against a previous 10.
Margins of improvement
Even though Italy is one of the latecomers in the construction equipment rental business, it can be optimistic. If compared to more advanced countries in this field like the UK, the Nederlands, Spain and France, there is plenty of room for growth.
As pointed out by Michel Petitjean, Italy has recorded records a recent positive sales trend of + 0.9% when compared to 2016.
We certainly believe that a further boost in the evolution of this sector will come from technological innovation.
In 2000, Jeremy Rifkin wrote in his book, The Age of Access:
Since, in an electronically-mediated environment, production processes, quipment, plant and services become quickly obsolete, property is no longer attractive in the long run, whereas short-term access becomes the solution more often adopted.
Even if the speed of technological change seems scary, we believe that it is a manageable process. We believe the rental and sharing economy are some of the smart tools we have at our disposal now and in the future.