Equipment rental is a growing sector that is becoming increasingly important in various industries, from construction to event organization. In this article, we discuss the market size of equipment rental, the growth of the sector since 2020, the technologies commonly used in this industry, and the average utilization rate.
It is quite difficult to find consolidated figures for the rental market and specifically for equipment rental. In Europe, we estimate that the market generates a turnover of around 31 billion, with approximately 18,100 rental companies operating. In total, there are approximately 161,500 employees active in the European rental industry. This involves a wide range of products, varying from construction machinery to event equipment and even furniture.
However, the market size varies greatly by region. North America and Europe are the largest markets, with a significant concentration of rental companies and a high demand for rented materials. Asia-Pacific is also showing rapid growth, mainly due to urbanization and infrastructure project development in that region.
The equipment rental market has undergone an interesting development since 2020. Despite the challenges brought on by the global pandemic, the sector has proven resilient. From 2020 to 2023, the European rental market grew by approximately 23%.
This figure is remarkable given the economic pressure that various industries have experienced. In the Netherlands, for example, legislation changed and many investments in projects were put on hold or canceled. Examples include large construction projects related to nitrogen emissions. The downward pressure on turnover in the industry is mainly due to these developments, as the construction sector accounts for 70% of rental turnover. In addition, tax rules in the Netherlands for real estate companies that rent out properties have changed.
Nevertheless, the Dutch market appears to be quite resilient and the contraction is not as bad as expected, because the economy is generally on the rise. The growth can be attributed to the following factors:
The rental of materials has evolved considerably through the use of technology. Below, we discuss some of the technologies commonly used that help rental companies and wholesalers work more efficiently and respond better to the needs of their customers.
With the rise of e-commerce, online rental platforms have become increasingly common. Customers can easily browse the selection, compare prices, and make reservations online. This not only offers convenience for the customer but also enables rental companies to offer their products to a wider audience.
Also read: The rise of industrial equipment rental
Management and tracking software helps rental companies efficiently manage their inventory and keep track of rented materials. These systems provide insight into availability, maintenance status, and rental history, enabling companies to plan better and reduce their operating costs.
Read also: How do you keep track of rental equipment?
IoT technology is increasingly being applied in the rental sector. By adding sensors to equipment, companies can collect real-time data about the use, location, and condition of the equipment. This helps improve customer service and reduce loss of or damage to equipment.
Also read: How technology is changing the rental industry
CRM systems are crucial for rental companies to manage customer relationships. These systems help companies collect customer information, automate marketing campaigns, and improve customer satisfaction. By gaining a better understanding of customer needs, companies can optimize their offerings and services.
AR and VR are increasingly used in the rental sector for product demonstrations and training. Customers can use AR and VR to see the products in a simulation of their own environment, which helps them make better-informed decisions about their rental choices.
The occupancy rate is another important statistic that indicates the degree of use of rented materials. It is expressed as a percentage and calculated by dividing the number of rented units by the total number of available units in a given period. A high occupancy rate indicates efficient business operations, while a low occupancy rate can indicate the underutilization of resources.
Security materials include a wide range of products such as cameras, alarm systems, and security lighting. The utilization rate for this category is on average between 60% and 75%. However, this percentage varies depending on your core activities, seasonal trends, and the demand for security during events and festivals. For example, there is often a higher demand for security materials for events during the summer months.
Event materials themselves, such as tents, chairs, and audiovisual equipment, generally have a higher utilization rate. The average utilization rate for this category is between 70% and 85%. This is mainly due to the high demand during the festival season and other events.
The utilization rate often peaks around the summer, when many events take place. However, some events require long-term rental of materials, which has a positive effect on the utilization rate.
The utilization rate for PPE items such as fall protection (harnesses) or masks, safety glasses, and hearing protection is on average between 50% and 70%. These materials are mostly used in construction and industry, where demand fluctuates depending on the project. Stricter safety regulations can also lead to a higher demand for PPE.
The utilization rate for tools such as welding equipment varies from 40% to 65%. This can vary depending on the sector and the type of projects companies are working on. Tools that are specific to niche markets can have lower utilization rates if the supply is large. Tools also require regular maintenance, which has an impact on availability.
The utilization rate for test and measurement equipment is generally between 55% and 75%. This equipment is often rented out for specific projects, which can influence demand. Innovations can also stimulate demand for new test and measurement equipment.
The future of the equipment rental market looks promising. With an expected annual growth of 5% to 7% in the coming years, we expect more innovations and improvements in the sector. Companies that adapt to changing customer needs and technologies will stay one step ahead in the competitive equipment rental market.
Furthermore, the focus on sustainability and efficiency is expected to increase. Companies that can optimize their processes and offer a wider range of sustainable products will gain a competitive advantage.
Also read: Rental is the base for sustainability
Would you like to know more about how to optimize your rental process? Watch our demo video or contact us for a free consultation.