The mobile elevating work platform (MEWP) rental markets in Europe, the United States, and China exhibited different levels of growth in 2023, driven by high demand, improved rental rates, and investments in fleet expansion and greener technologies, according to a sequential analysis by market research company KHL.

This has paved the way for a generally positive outlook for 2024, despite persistent challenges such as inflation, geopolitical uncertainties, and supply chain issues.

The recently released 2024 IPAF rental market reports take a deep dive into these markets, analyzing the factors and forces affecting access equipment rentals worldwide. Let's take a closer look at the key markets and the challenges they face.

Growth in Europe

The European MEWP rental market reached total revenue of EUR 3.4 billion in 2023, registering strong growth across most markets, particularly in the non-construction sector.

This growth was supported by a 4% GDP increase, marking a recovery from the decline of the previous year. The GDP outlook for Europe remains positive, with expectations of further growth in 2024 and 2025.

However, construction output in the 10 European countries studied declined in 2023 and is expected to dip slightly again in 2024 before showing early signs of recovery in 2025.

The European MEWP fleet was approximately 357,000 units at the end of 2023. Utilization rates remained stable, partly driven by the limited availability of equipment in some countries and partly by strong demand.

All European countries reported satisfactory utilization rates above the 60% threshold, indicating a positive and stabilized market outlook.

Rental companies continued to invest in their fleets, catching up with renewal and expansion plans as delivery times from MEWP manufacturers decreased and strong demand for green equipment persisted.

France maintained its position as having the largest MEWP rental fleet, exceeding 71,000 units after growing by about 3,500 machines. Despite the strength of its fleet, France struggled with construction.

Germany followed with a fleet size of nearly 64,500 units, while the UK had almost 62,000 units.

Notable growth rates were observed in Spain (10%) and other major markets. Average revenue per unit increased to EUR 9,597, with Germany maintaining the highest revenue per unit.

Investments in fleet renewal and expansion increased by 6% in 2023 compared to 2022. This investment was driven by high demand and the desire to switch to greener technologies.

With unprecedented market demand and rising inflation and MEWP purchase prices, rental companies were forced to significantly increase rental rates in most European countries. The northern region, in particular, faced challenges, mainly due to consolidation activities, increased market competition, and suppressed rental rate increases.

Positive Outlook

The market outlook for 2024 remains positive as delivery times from manufacturers are expected to further stabilize, and rental companies forecast continued healthy demand.

However, as inflation is expected to decline in Europe, rental rate increases should slow, while investments are expected to decrease as rental firms plan more prudent spending to target margins over volume.

Speaking about the general economic outlook and construction activity, the individual economies of Europe present a mixed bag of positive and challenging markets. Overall, southern markets like Spain and Italy are outperforming northern countries currently facing economic challenges.

"Countries more centrally located, including the major European economies of the UK, France, and even Germany, have experienced declines," Youdale said, noting that this puts pressure on those rental markets.

Despite preparing to host the Paris 2024 Olympics later this summer, for example, construction activity in France in 2023 fell to its lowest level in three years.

Similarly, in Germany, residential construction is the biggest concern, with new construction estimated to decline by 15% in 2024. In the UK, construction activity is scheduled to drop by 2.1% this year.

"However, it's not all bad, and reports from the rental sector are more positive," Youdale stated. "Rental somewhat stands apart from the trends in Europe, compared to general construction and economic decline."

He added, "The advantage that the access equipment sector has over general construction equipment is that it can be used in a wider, more evergreen range of applications. Understandably, rental companies are looking to capitalize on this by investing in more specialized equipment rather than getting stuck in the up-and-down cycle of construction."

Import tariffs on Chinese imports, however, could affect equipment prices and product choices for European rental companies.

The US Market Remains Strong

In the United States, the MEWP rental market also saw substantial growth in 2023. US GDP grew by 7% in 2023, following an 8% increase in 2022, partly driven by strong performance across all construction sectors.

Construction output increased by approximately USD 20 billion, contributing to high demand in the MEWP rental market. MEWP rental revenue in the US reached a record USD 15 billion in 2023, up 10%. The fleet size expanded by 10%, totaling 857,861 units by the end of the year.

Utilization rates in the US remained at a historic high of 73% on average. Despite improved delivery times for new equipment from manufacturers, rental companies reported that sustained demand levels combined with US tariffs on equipment from China kept pressure on utilization rates.

Due to increased investment levels and reduced equipment availability, the average fleet age saw a slight reduction in 2023.

High tariffs imposed on machines manufactured in China continued to restrict the availability of certain models in the market, increasing market pressure.

Rental rates increased by 5% in 2023 to offset rising MEWP purchase costs and inflationary pressures. Most companies expect further rental rate increases in 2024, though at a slower pace, as maintaining customer relationships with large year-on-year increases becomes challenging.

"North American markets are expected to remain strong," Youdale mentioned, referencing a statement by Tom Doyle, vice president of program development at the American Rental Association, who said in February that "Rentals should benefit from tailwinds of interest rates, inflation, improving supply, preference for rent, and government and private spending."

Youdale added, "Indeed, in May, [ARA] updated its forecast for this year to show an increased growth prediction of 9.7%.

Growing industries such as data centers, which the US leads with new projects worth USD 160 billion, benefit from specialized rentals in this market.

This is evidenced by the actions of major US rental companies like United Rentals, which have acquired companies to expand their specialized offerings, including the temporary road rental business, Yak Access. Similarly, Herc Rentals noted that key growth markets include semiconductors and data centers, public infrastructure, and the expansion of its specialized product offerings.

Meanwhile, Sunbelt Rentals expects its specialized rental business to reach USD 5 billion in revenue by the end of its current five-year plan.

China Looks to the Future

China's GDP declined by approximately 1% in 2023, and the forecast for 2024 is set at around 5%. The macroeconomic outlook for 2024 and 2025 is generally more optimistic than in 2023. Construction activity is expected to remain strong.

In 2023, the Chinese MEWP rental market saw significant revenue growth of 19.5% compared to the previous year.

This growth, driven by fleet expansion and increased utilization rates, brought rental revenue to RMB 14,882 million (EUR 1,946 million). Despite this, rental rates continued to decline due to intense competition, particularly in major cities in eastern and southern China.

The total rental fleet in China expanded to nearly 530,000 units, primarily comprising scissors (73.5%) and booms (25%). The market is expected to continue growing in 2024 and 2025, supported by opportunities in urbanization, maintenance, and emerging industries such as renewable energy. However, rental companies are anticipated to be more cautious about fleet expansion due to economic uncertainties.

The average utilization rate increased to 71% in 2023, rebounding as lockdown measures relaxed and downstream projects resumed. Although rental rates are expected to continue declining, this decline is expected to slow, with regional differences in rate changes.

Overall, the market outlook remains positive, with steady demand driven by construction safety and efficiency awareness.

Aside from the positive indicators, Youdale said the generalist rental sector in China is far from its counterparts in the US and Europe, as it struggles to reach maturity.

"With that said, the largest rental companies in the country have grown at an enormous pace. This is happening specifically with access equipment, while the generalist model has not properly started.

"Overall, China's access industry grew by about 40% year-on-year. The forecast this time last year was for growth to slow in the next two years due to the market becoming more saturated. That slowdown has already begun.

"It's not all about saturation," Youdale added. "The ongoing economic recession in the country doesn't help, nor does the construction crisis, with about 390 million square meters of unsold residential properties in China, according to national bureau statistics.

"However, the future of the access industry in China is strong. Despite broader recessions, emerging industries such as wind power, solar energy, and broader renewable energy solutions have wide potential for aerial platforms." (Photo: Dreamstime)