Rental of construction equipment: the turnaround after the euphoria?

The profession has experienced 11 quarters of growth, has reinvested thanks to overinvestment tax measures, but expects a downturn in 2019.

Booming in construction sites and public works, the rental sector has seen very strong growth in recent months. From 2016 to 2017, growth was +10%, mainly driven by public works, and to a lesser extent, by building; turnover in the sector was around 4.22 billion euros in 2017.

According to Joël Fruchard, president of the “Rental” group at DLR, the national union of distributors, rental companies and repairers of construction and handling equipment, which represents 70% of the sector, in the second quarter of 2018, rental growth was still holding up a level of +6% compared to the 2nd quarter of 2017, and even +14% compared to the 1st quarter of 2018. That is eleven consecutive quarters of growth.

In addition, the evolutions are disparate: depending on the region, the increases vary from +5% to +10% over the first eight months of the year,” he comments. This progression, however, owes a lot to road companies, according to Pierre-Yves Rallet, Marketing and Sales Director of the Loxam group.

A light landing in perspective

Note that the halt coincides with the interruption, in mid-April last, of the tax advantage by additional amortization of the productive investment initiated by Emmanuel Macron, then Minister of Finance.

In fact, also benefiting from low-rate bank loans, the sector invested heavily in 2016 and 2017: respectively, +72% and +40%. In 2017, €1.2 billion was invested by this sector Consequence: the age of the equipment fleet down to 50 months (-4 months).

After the "Macron cars", we can legitimately speak of the "Macron shovels". Joël Fruchard therefore expects a slight landing during the next two quarters, but the year should end with an increase of slightly less than 10%.

After this period of euphoria, this union anticipates a return to stagnation, or even a turnaround, starting in 2019. Joël Fruchard notes the budget restrictions of certain major players. “In addition, we collect feedback from members on their collection difficulties; rental companies are used to it, but the phenomenon seems more significant than in previous years. This is particularly the case on the sites of the Grand Paris Express where they respond to a large number of players and at competitive prices. »

Source: batirama.com / Bernard Reinteau