French rental survey finds growth, but trend is down

The French equipment rental market grew by 7.3% year-on-year in the third quarter of 2023 according to the latest survey by DLR, the French body that represents more than 1000 companies in the construction and material handling sectors.

The positive findings for the rental sector in DLR’s quarterly Baromètre survey were echoed in the material handling sector (both sales and rental), where growth over the previous year was a remarkable 15.5%. In contrast, there was a reported 3.2% fall in sales for distributors of construction equipment.

However, the survey become less positive when considered on a sequential quarter basis, with construction equipment rental revenues in the third quarter down by 25.4% compared to the second quarter of the year.

For construction equipment distribution companies, there was no change in activity levels from the second quarter, while material handling companies reported a 5.3% fall from the previous quarter.

DLR said the fall in inflation rates had encouraged customers to turn to new machines rather than used equipment, but in the third quarter all distribution activities experienced a slowdown from Q2, with sales of used equipment down by 35%, spare parts 31% lower, and new equipment sales 26% down.

The figures, said DLR, reflect an unfavourable economic climate for its members; “Difficulties in accessing financing continue to worry industry leaders, and the business climate remains uncertain with winter approaching.

“Respondent companies are concerned about low orders at the start of winter. Persistent difficult financing conditions are having negative effects on the number of orders. The severe weather conditions, exacerbated by climate change, will further constrain DLR companies this winter.”

DLR companies’ forecasts for the final quarter of the year are more pessimistic than last quarter, especially for distribution companies. Activity and recruitment forecasts for Q4 2023 are very pessimistic for distributors of construction equipment, but rental companies are relatively more optimistic about their recruitment and activity levels, with only “slightly more caution than last quarter”, said DLR.

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