Views: 10 Author: Site Editor Publish Time: 31-05-2024 Origin: Site
Recently, major industry organizations have released forecasts for the US and European economies and their respective equipment rental markets this year, and the results are different. The US is expected to grow faster than initially forecast in the short term, but growth in the European market is expected to slow.
The forecasts for the equipment rental market also reflect the realities of different regions.
The American Rental Association (ARA) has updated its forecast released in February, and the new forecast shows that the US rental industry revenue this year may reach US$79.2 billion, up 2.8% from the previous forecast of US$77.3 billion.
"There has been no severe recession, nor has there been an excessive boom. The outlook remains stable and inflation is falling," said Scott Hazelton, managing director of S&P Global, on the latest situation. He pointed out that although inflation has increased this year, the growth rate will slow slightly. He added: "The growth rate will gradually decline in the next few years, with a growth rate of 3.8% in 2025 and 3.1% in 2026."
In addition, Canada's equipment rental revenue is expected to grow by 7.2% this year, totaling US$5.79 billion.
General equipment and construction and industrial equipment (CIE) are both expected to achieve growth. General Equipment revenue is expected to grow 9.7% to $16.6 billion this year, and investment is expected to expand further in 2024 and beyond, with growth of 7.9% in 2025 and 6.4% in 2026.
In early May, the European Leasing Industry Conference held in Lisbon, Portugal, discussed the current situation and future of the European leasing industry.
In the UK, economic growth forecasts for 2024 have been lowered by 1.2% to 1.5%, and economic growth forecasts for 2025 are expected to fall by 2% to 2.5%.
Germany currently expects economic growth in 2025 to be 3%, down 1.4% from earlier forecasts.
The Nordic region has the largest decline in economic forecasts for 2025, with Norway down 5.1%, Sweden down 2%, and Finland down 2.8%.
Meanwhile, Spain and Italy have maintained relatively stable investment levels with financial support from the European Union, and investment is expected to increase by 5.5% and 3.5% respectively in 2025.
KPMG, a global professional services firm that integrates audit, tax and consulting services, believes that economic activity in Europe is slowing down since 2023 for a variety of reasons, including inflation, which has prompted central banks to raise interest rates. Despite these challenges, there are also some positive factors, such as the NextGenerationEU green bond program issued by the European Union, which will allocate up to 800 billion euros by 2027, which is a major opportunity. According to the criteria, countries such as Spain and Italy can obtain up to 10% GDP growth with the help of EU financial support, while Germany and France may see GDP growth of less than 2%.
As the leasing industry diversifies and targets new end markets, it will also be more closely connected to the global economy.
No matter which market, equipment leasing is still affected by the development of the construction industry, and many of the same drivers are providing impetus for the leasing industry.
In the United States, factors such as increased infrastructure investment, increased housing demand, and a boom in data center construction have driven the development of the leasing industry, including initiatives to bring semiconductor manufacturing back to the United States. Reuters quoted Christopher, chief economist of FWDBONDS in New York "Construction activity is one of the reasons why the Fed's rate hikes did not lead to a trough in the economy as predicted by economic models of other business cycles," Rupkey said.
"We have funding for new industrial construction projects, and the only risk is a severe shortage of construction workers across the country." In Europe, the construction industry shows a similar slowdown in growth as the region's rental market. After a 5.3% recovery in 2021 and a 2.7% increase in 2022, it is expected to fall by 2.1% this year. However, a modest 1.5% increase is expected by the end of 2025.
Volatility in energy markets, high interest rates and tight monetary policy all affect economic trends in the European region. The industry's concerns about the residential construction market are particularly serious. Due to the "intensified contraction of the new residential market", KPMG has lowered its expectations, causing confidence in the industry to fall to the lowest point since the epidemic.
KPMG's research results show that by 2023, 65% of the equipment rental industry in Europe is related to the construction industry. Of these, 35% are residential or non-residential buildings (the remaining 30% are civil engineering). The slowdown in residential construction, declining customer confidence and rising interest rates have had a significant impact on the European rental industry.
