Collapse of equipment rental in the construction sector

Construction equipment rental report in 2009: a hard-hit sector that expects a recovery at the end of 2010

The DLR Professional Federation (Distributors, Renters and Repairers of Construction and Handling Equipment) publishes the 2009 review of the construction equipment rental sector. Hit by an unfavorable global economic environment that has affected the construction sector, the rental business is drawing a pessimistic conclusion for 2009: a turnover that has fallen by 13%, a drastic 70% drop in investments and a reduction in the profession's workforce...

In this context, the sector does not expect a real recovery before the end of 2010, which looks set to be difficult in a context of slowing activity.

Rental companies' turnover fell by 13% in 2009.

This retraction, which had particularly strong effects on rental companies, is explained by:

• the bursting of the real estate and construction bubble




• the decrease in volumes (-6%)




• price drop





 

The first half of 2009 was marked by a sharp decline in volume and a drop in prices. In the second half, volume began to recover, but price pressures became even more pronounced. Turnover therefore recovered much less quickly than it had fallen at the beginning of 2009.

Nearly two-thirds (64%) of turnover is generated by companies with more than 50 employees. This share is increasing., the sector continuing to concentrate, and stabilizes rental turnover in a difficult economic context.

The share of pure rental in the total turnover of rental companies amounted to 76% in 2009It is the same as in 2008, which underlines that companies in the sector are still focused on their core business.

Rental companies reduced their investments by 70% in 2009, falling from 800 to just 250 million euros, with a significant deterioration in the return on investment (from 47% in 2008 to 44% in 2009). The decline in investments was even more marked in companies with more than 50 employees, falling to 4%. The investment rate for construction equipment rental companies stood at 8%, its lowest level since the creation of the annual rental report in 2003.

We observe a aging of the park, the average age of the equipment reaching 54 months (+5 months compared to 2008).

è As for the profession's workforce, they fell by 6% in 2009This is more than the entire French economy, and more than the construction industry. Virtually stable in companies with fewer than 50 employees, employment held up better in small structures than in large ones, where it fell by 7%.

The average workforce is about 20 employees per company.

Key rental figures in 2009

· 945 companies in France, 5 more than in 2008

· 2 agencies (+645% compared to 1,7)

· 19500 employees: a 6% reduction in the workforce compared to 2008.

· 3,17 billion euros in turnover (-13% compared to 2008)