Market Trends of Europe Construction Machinery Rental Industry
The Building Construction Industry is Expected to Remain the Focal Point
The expansion of the European construction market can be attributed to rising demand for housing in urban areas, increased infrastructural development, and increased modernization and renovation of buildings to improve their energy efficiency. With the region's robust economic growth, commercial infrastructure construction, such as offices, schools, hotels, restaurants, and leisure facilities, is rising.
Various favorable initiatives and investments by governments to improve housing infrastructure and provide housing for the vulnerable section are also supporting the growth of the European construction machinery rental market. In October 2023, the Czech Republic updated its National Energy and Climate Plan (NCEP), intending to construct 6,000 MW of solar plants, including building a substation and installing PV panels, turbines, generators, and transmission lines by 2030. In March 2024, the European Investment Bank (EIB) approved over USD 111 million for expanding the Kruonis Pumped Storage Hydroelectric Power Plant in Lithuania, aiming to boost capacity from 900 MW in 2023 to 1 GW by 2026.
Developing economies are investing heavily in infrastructural development to address major issues such as traffic congestion, population growth, high manufacturing costs, and aging transportation infrastructure, while developed economies are investing in technologies such as earthquake-proof buildings and hyperloop to improve their current infrastructure. These factors are driving up sales in the construction machinery rental market.
Increasing technological advancements and digitalization in construction equipment are anticipated to offer enormous growth opportunities in the construction machinery rental market during the forecast period. Growing product launches and innovations may further enhance the adoption of small skid steer loaders during the forecast period.
Construction equipment manufacturers are pressured to choose electric and hybrid vehicles over traditional hydraulic and mechanical ones due to the demand for cost-effective machines and regulatory pressures for lower emissions. As a result, the electrification of construction equipment is gaining momentum. For instance,
- In January 2024, Japanese construction machinery manufacturer Komatsu introduced the PC138E-11 electric excavator as a rental machine, first in Japan, followed by Europe. The 13-ton machine is particularly suitable for urban construction projects.
Owing to such developments and rising construction activities, the market is expected to continue to grow during the forecast period.
Germany Holds the Largest Market Share
Construction rental machinery is a growing market in Germany due to the increasing need for advanced equipment, technological advancements, and the rise in construction activities in the country. Bulldozers, excavators, and cranes are among the most in-demand heavy machinery in Germany. Construction companies are meeting their objectives at a low cost while avoiding high expenses by renting construction equipment.
The growth of the construction industry primarily drives the demand for rental construction machinery. An increase in government investment in infrastructure projects is intended to spur economic growth and generate opportunities, which may be favorable to the German construction industry. Additionally, the rise in urbanization and the nation's expanding population may boost the demand for rental construction equipment.
The COVID-19 pandemic significantly impacted the German construction industry, with many construction projects being delayed or canceled. However, the industry has shown resilience, and construction activity has gradually picked up pace as the economy reopened. High demand for construction equipment rentals is expected on the back of infrastructure development projects in the country over the coming years. For instance,
• In February 2024, the Saxony city government unveiled a EUR 105 million (USD 107.5 million) package for housing construction and low-interest loans under 1% with a 25-year fixed rate for purchasing condominiums.
- In December 2023, construction began on the Fehmarnbelt tunnel near the Fehmarn strait to develop an 18.5 km stretch to reduce travel time between Hamburg and Copenhagen from 4.5 hours to 2.5 hours, with completion expected by 2029.
- In July 2023, NeuConnect Interconnector announced the commencement of work on the first UK-German power link project. This project aims to enhance energy security as Europe looks for alternatives to Russian pipeline gas following the invasion of Ukraine.
The demand for construction equipment rentals is expected to grow in the coming years. The need for affordable solutions to address equipment requirements, rising government spending on infrastructure projects, and the expansion of the construction industry are expected to contribute to the growth curve of the German construction machinery rental market during the assessment period.
