Revenues for the world’s 100 largest rental companies, the IRN-100, have more than doubled in the last decade, according to The global rental industry, a unique new joint report from Off-Highway Research and International Rental News magazine.
The industry’s remarkable expansion is equivalent to a compound annual growth rate (CAGR) of almost 9 per cent. Over the same period, global construction equipment sales have grown at a CAGR of just 4 per cent. Even taking into account the impacts of Covid-19, Off-Highway Research forecasts revenues for the IRN-100 will rise to €75 billion by 2024.
The IRN-100 is a league table based on companies’ rental revenues which is compiled every year by International Rental News. It also measures other business fundamentals such as headcount, number of outlets, capex and the type of rental carried out. More than a decade’s worth of this data has been analysed by Off-Highway Research to highlight the key trends and drivers in the industry.
Off-Highway Research managing director, Chris Sleight said, “Consolidation has been the fundamental driver of revenue growth for large rental companies all over the world, including those in some of the most advanced markets such as Europe, Japan and North America. We have also seen the share of revenues for generalist rental companies – those with a broad offering of construction equipment and tools – rise over the last decade as they have started to move into areas such as AWP and power rental, which were previously more specialised disciplines.
He continued, “In addition there is a clear trend around the world away from contractors owning their own fleets towards the rental model. This is a slow cultural shift for many and some countries are further down this path than others. However, we believe these two key trends will continue. One of the results of this is that the large rental companies are now among the biggest buyers of construction equipment in the world. Several have Capex in excess of €1 billion per year, and for the largest the figure is closer to €2 billion.”
As well as highlighting growth trends which are important OEMs and other companies seeking to supply into the rental industry, the report also analyses key benchmarks on productivity, footprint and capex ratio which rental companies themselves could find instructive for their businesses.
Thomas Allen, editor of International Rental News said, “The largest rental companies in the world are growing at a high rate, but at the same time they are becoming more productive, generating more revenues per employee and per depot than ever before.”
In addition to looking at industry-wide and company specific benchmarks, the report also discusses other trends in the rental industry, such as the prevalence of OEM and dealer-owned rental operations and trends in public vs. private ownership. It also makes comparisons between rental revenue growth and other key metrics, such as GDP and construction equipment sales.
The global rental industry is available to buy from Off-Highway Research’s online store. Click here for more details.