Trends in the European

Equipment Rental Market

Michel PETITJEAN,
ERA Secretary General
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ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 Trends in the European equipment rental market

1. Equipment rental drivers

2. Equipment rental markets

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 1 – Equipment rental drivers
Europe’s growth continues to slow…
Positive replies minus negative replies Eurozone Real GDP growth is projected to slow from
1.8% last year to 1.1% in 2019 and 1.0% in 2020.
40 Leading indicators for the industrial sectors remain
weak. The risk of adverse spillovers to domestic
20 demand persists.
Percent of total

Potential risks to the forecast

-20
 Hard Brexit/ “No-deal” Brexit
-40  Escalation in trade protectionism
01-2017 07-2017 01-2018 07-2018 01-2019  Fiscal crisis in Italy
 Deterioration in private-sector credit
Consumers Industrial sector Services sector conditions.
Source: European Commission © 2019 IHS Markit

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 1 – Equipment rental drivers
… however, pessimism has not yet gained steam in construction
Total construction in Europe by segment [Euro billion] Residential
The pickup in salary growth and the continued
Infrastructure Non residential Residential
expansion in employment should support private
consumption, however with job creation slowing
+4.7% 2,230 consumer spending growth will also moderate.
+4.1% 2,130
2,045
Non residential
Corporate investment may be boosted by rising
demand and an accommodative credit conditions, but
we expect its growth to moderate in 2019 and beyond
as the economy cools.
Infrastructure
While still elevated, the general government debt-to-
GDP ratio declined recently with concerning additional
2018 2019 2020
expenditure just as the economy head into a phase of
Source: IHS Markit © 2019 IHS Markit lower growth.

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

 ERA Convention 2019 1 – Equipment rental drivers
Most of the main European markets are still on a growth path
Total construction – 2018 2018 [Euro billion] Total construction growth [Local Chart
Currency Unit]
Title

United Kingdom 0,8%

R. EU28 + EFTA United Kingdom (LCU)
31% 16% 5,9%
Germany

France 2,9%

Italy 2,2%
2,045 Germany
Spain 4,2%
Bn Euro 16%

Netherlands 4,3%
Netherlands
5% R. EU28 + EFTA 4,9%
(€)

0,0% 2,0% 4,0% 6,0% 8,0%

France
Spain 14%
Italy 2019 2020
8%
Source: IHS Markit 10% © 2019 IHS Markit Source: IHS Markit © 2019 IHS Markit

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 Trends in the European equipment rental market

1. Equipment rental drivers

2. Equipment rental markets

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 2 – Equipment rental markets

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 2 – Equipment rental markets
European equipment rental size (2018) – Overall Europe
Equipment rental –Total
2018turnover [million EUR]
[Euro billion] Eurostat data status
The update status should be the following: Year-2/ 4-
Remaining EU28 + EFTA
19%
digit level

: Y-2/4-digits
United
Netherlands Kingdom : Y-2/3-digits
4% 26%

Data status
Spain 26,6
6%
Bn Euro

Italy
6%
Germany
17%
Sweden
6%
France
16% © 2019 IHS Markit
© 2019 IHS Markit
Source: IHS Markit

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

 ERA Convention 2019 2 – Equipment rental markets
European equipment rental forecasts (2019-20) – Overall Europe

Equipment Rental Market

8%
Revised Forecast
Previous Forecast
Average Yearly Growth – LCU (2019-2020)

7%

6%
Germany
+1.1 Average* Rental
5%
Growth +4.8%

France
4%
-0.2

3%
United Kingdom
2% -0.1

1%
€0 € 1.000 € 2.000 € 3.000 € 4.000 € 5.000 € 6.000 € 7.000
2018 Total Rental Turnover (Euro million)

Source: IHS Markit *) Average of the 15 countries © 2019 IHS Markit

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

 ERA Convention 2019 2 – Equipment rental markets
European equipment forecasts changes (2019-20) – around 1 Bn
Euro markets
Equipment Rental Market

8%
PL Revised Forecast
+1.3 Previous Forecast
Average Yearly Growth – LCU (2019-2020)

7%

6% CZ
+0.0 Average* Rental
Growth +4.8%
5%
AU FI NO ES
-0.1 -0.1 -0.4 NL +0.2
4%
+0.3
BE SE
-0.1 IT -0.1
3%
CH -0.9
DK
-0.6 -0.4
2%

1%
€ 100 € 400 € 700 € 1.000 € 1.300 € 1.600
2018 Total Rental Turnover (Euro million)

Source: IHS Markit *) Average of the 15 countries © 2019 IHS Markit

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 2 – Equipment rental markets
ERA/IRN Rental Tracker – based on 155 survey responses
Time Utilization Business Conditions 1-year Expectations
 Utilization mostly improving  Good business conditions.  Good expectations for 2020
 Slight deterioration increase  Expectations less optimistic than 2018

Q1 2018 Q3 2018 Q1 2019 Q1 2018 Q3 2018 Q1 2019 Q1 2018 Q3 2018 Q1 2019

Deteriorating Same Improving Worse Same Better

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 2 – Equipment rental markets
European average Rental growth comparison (2019-20)

Compared to Construction Compared to GDP

France Belgium Switzerland France Belgium Czech Republic
Strong Italy Denmark Italy Denmark Germany
rental Spain Austria Spain Austria Finland
growth Netherlands Netherlands Poland
Norway 9 Countries Norway 12 Countries

Sweden Sweden
Stable United Kingdom Switzerland
rental
Czech Republic
growth
Germany 4 Countries 2 Countries

Weak Finland United Kingdom

rental Poland
growth 2 Countries 1 Country

Note: All the 15 countries have a positive rental growth

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019

QUESTIONS & ANSWERS

MICHEL PETITJEAN

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ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May

ERA Convention 2019 UK focus
The United Kingdom market uncertainty, however, strong
construction growth expected in 2020
Brexit deadline extension
 Economic uncertainty also extended
Declining investments
 Non-residential hit the most

Increased cost of construction

Anticipated pent-up demand in the property market

Real estate developers to rethink projects

Total UK Construction, LCU
 Projects on hold

The UK economy is still expanding, underpinned by resilient consumer spending propped up by

strong employment growth, helping to offset the drag from business investment (also in addition to a
2018 2019 2020
larger-than-expected boost from companies building stocks ahead of recent Brexit deadlines).

ERA Convention 2019, “RENTAL: A SHARING ECONOMY”, Madrid, 15 and 16 May